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Turkmen leader culls energy officials

By Alexander Vershinin
Associated Press Writer / October 13, 2009

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ASHGABAT, Turkmenistan—Turkmenistan's president fired almost all the country's top oil and gas officials Tuesday, accusing them of waste and inefficiency in extracting the Central Asian nation's large oil and natural gas resources.

Revelations about trouble in the former Soviet state's energy sector could reawaken concerns about Turkmenistan's ability to meet all its ambitious export targets.

President Gurbanguli Berdymukhamedov said operations in the oil and gas sector, which accounts for most of the country's economy, were being poorly carried out.

"As a result of the irresponsible attitude toward their work shown by some industry leaders, our government has not received the expected result," Berdymukhamedov told government officials in a televised meeting.

Officials dismissed in the industry shake-up included Mineral Resources Minister Annaguly Deryayev; head of state gas company Turkmengaz, Dovlet Mommayev; and state oil company chairman Orazdurdy Khadzhimuradov. All were expected to address international investors at an oil and gas conference in the Turkmen capital, Ashgabat, next month.

The large-scale reshuffle is reminiscent of Berdymukhamedov's eccentric predecessor, who routinely dismissed high-level officials while subjecting them to humiliating televised scoldings.

Berdymukhamedov reserved particularly sharp criticism for the fall in oil production and the failure to extend the gas network to several residential areas across the country.

"Instead of oil production going up, it is in constant decline," he said. "Foreign companies that work in our country under the same conditions, but that use modern technology and equipment, operate twice as efficiently as (state oil company) Turkmenneft."

Turkmenistan is the largest gas producer in the former Soviet Union after Russia, which has had a lock on most of the reclusive desert nation's gas exports since the Soviet collapse in 1991.

But Berdymukhamedov has carefully opened up to courtship by the West and China since he came to power after the death of longtime autocratic leader Saparmurat Niyazov in December 2006.

In December, Turkmenistan is due to begin pumping natural gas through two new pipelines to China and Iran.

Western efforts to secure a new route for Turkmen gas exports are currently focused on the creation of a trans-Caspian pipeline. Under a European Union-backed plan, the route would feed into the Nabucco pipeline, which would run from the Caspian Sea via Turkey, Bulgaria, Romania, Hungary and end in Austria.

Another, much more expensive, option would be liquefying the gas and transporting it across the Caspian Sea in tankers -- a possibility that Berdymukhamedov hinted at in the government meeting.

"It is necessary to create a large production capacity for liquefied gas and to increase its exports," he said.

Without specifying any dates, Berdymukhamedov estimated that Turkmen gas production will eventually reach 250 billion cubic meters (8.8 trillion cubic feet) per year and that oil output will hit 100 million tons annually. Turkmenistan currently produces 80 billion cubic meters (8.8 trillion cubic feet) of natural gas and about 10 million tons of oil per year.

Berdymukhamedov said that investments into the energy sector have been drastically boosted, but that waste and inefficiency have led to disappointing results.

Some international experts have expressed doubt that Turkmenistan can meet all its supply obligations, but the government insists there is enough gas.

Turkmenistan estimates its total reserves at more than 700 trillion cubic feet (20 trillion cubic meters), but international experts have questioned that figure.