Is Turkmenistan Neutral?

Turkmenistan’s late President Saparmurat Atayevich Niyazov (1940-2006) created a personality cult that will survive him and probably several successors, including Gurbanguly Berdimuhammedow. The motto he established: Halk, Watan, Turkmenbashy (One Nation, One People, One Leader) can still be seen everywhere throughout Turkmenistan, from the most remote villages to monuments in the capital of Ashgabat.

Even though Berdimuhammedow has promised various reforms, it seems change is slow to come. The Internet is somewhat more available, but access is by no means widespread. One of the best indicators may be the Tolkuchka (“shoving”) market outside Ashgabat, where people come from all over the country to buy and sell, and the selection of carpets remains nothing if not spectacular. The problem, however, is that all but the smallest carpets require an export certificate, and these are still difficult to come by.

Turkmen Customs officials are friendly and have even been known to offer a traveller a drink of vodka, but they still search luggage looking for one thing in particular: carpets!

Turkmenistan’s future lies in its vast natural resources. Turkmenistan ranks fourth in the world to Russia, the United States, and Canada in natural gas and oil extraction. The Turkmenistan Natural Gas Company (Turkmengaz), under the auspices of the Ministry of Oil and Gas, controls gas extraction in the republic. Gas production is the youngest and most dynamic and promising sector of the national economy. Turkmenistan's gas reserves are estimated at 8.1-8.7 trillion cubic meters and its prospecting potential at 10.5. trillion cubic meters. The Ministry of Oil and Gas oversees exploration of new deposits. Sites under exploration are located in Mary Province, in western and northern Turkmenistan, on the right bank of the Amu Darya, and offshore in the Caspian Sea. Turkmenistan has always described itself as neutral, but this neutrality may not extend to oil and gas. In April 2003, Niyazov signed a 25-year gas deal with Russian President Vladimir Putin under which Russia gained the right to buy most Turkmen gas starting in January 2007.

In 2006, under the contract, Russia was to buy 7 billion-10 billion cubic meters of Turkmen gas. Then on 29 December, Aleksei Miller of Gazprom signed a new contract in Ashgabat to buy 30 billion cubic meters of gas from Turkmenistan in 2006 at $65 per 1,000 cubic meters. The result is a decidedly pro-Russian and anti-Ukrainian arrangement. Given Ukraine’s pro-European inclinations, the situation could become quite complex if things do not change.

Profile: Dmitrii Anatolevich Medvedev

Dmitrii Anatolevich Medvedev, born September 14, 1965 in Leningrad), is a Russian politician and businessman. He was appointed first deputy prime minister of the Russian government on November 14, 2005. Formerly Vladimir Putin's chief of staff, he is also the chairman of Gazprom's board of directors, a post he has held for the second time since 2000.

Medvedev graduated from the Law Department of Leningrad State University in 1987 (together with Ilya Yeliseyev, Anton Ivanov, Nikolay Vinnichenko and Konstantin Chuychenko) and in 1990 got his PhD in private law from the same university. In 1990 he worked in Leningrad Municipal Soviet of People's Deputies. Between 1991 and 1999 he worked as a docent in Saint Petersburg State University. In 1991 - 1996 Medvedev also worked as a legal expert for the Committee for External Relations of the Saint Petersburg Mayor's Office under Vladimir Putin.

In November 1993, Medvedev became the legal affairs director of Ilim Pulp Enterprise, a St. Petersburg-based timber company. In 1998, he was elected a member of the board of directors of the Bratskiy LPK paper mill. He worked for Ilim Pulp until 1999.

In November of 1999 he became one of several St. Petersburgers brought by Vladimir Putin to top government positions in Moscow. In December of the same year he was appointed deputy head of presidential staff.

Dmitrii Medvedev became one of the politicians closest to President Putin and during the 2000 elections when he was head of the presidential election campaign headquarters. From 2000 to 2001, Medvedev was chair of Gazprom's board of directors. He was then deputy chair from 2001 to 2002. In June of 2002, Medvedev became chair of Gazprom board of directors for a second time. In October 2003, he replaced Alexander Voloshin as a presidential chief of staff. In November 2005, he was appointed by President Vladimir Putin as First Deputy Prime Minister, First Deputy Chairman of the Council for Implementation of the Priority National Projects attached to the President of the Russian Federation, and Chairman of the Council's Presidium.

Dmitrii Medvedev is considered as a moderate liberal pragmatic, able administrator and loyalist of Putin. Following his appointment as First Deputy Prime Minister, some political observers still expect him to be nominated as Putin's successor for the 2008 presidential elections, despite Putin’s appointment of Viktor Zubkov as prime minister in September of 2007.

What If Gazprom Becomes A Russian National Asset?

Gazprom is the largest Russian company and the biggest extractor of natural gas in the world.

With sales of US$ 31 billion in 2004, it accounts for about 93% of Russian natural gas production and with reserves of 28,800 km3, it controls 16% of the world's gas reserves. After acquisition of the oil company Sibneft, Gazprom, with 119 billion barrels of reserves, ranks behind only Saudi Arabia, with 263 billion barrels, and Iran, with 133 billion barrels, as the world's biggest owner of oil and oil equivalent in natural gas.

By the end of 2004 Gazprom was the sole gas supplier to at least Bosnia-Herzegovina, Estonia, Finland, Macedonia, Latvia, Lithuania, Moldova and Slovakia, and provided 97 percent of Bulgaria's gas, 89 percent of Hungary's, 86 percent of Poland's, nearly three-quarters of the Czech Republic's, 67 percent of Turkey's, 65 percent of Austria's, about 40 percent of Romania's, 36 percent of Germany's, 27 percent of Italy's, and 25 percent of France's. The European Union gets about 25% of its gas supplies from this company.

On July 4, 2007 the Russian State Duma passed a bill giving Gazprom and Transneft the authority to create their own security forces with greater powers than other private security firms. Gennady Gudkov, a deputy in the State Duma who opposed the bill, raised concerns by calling it a “Pandora’s box... This law envisages the creation of corporate armies. If we pass this law, we will all become servants of Gazprom and Transneft.” If Communist Party proposals for renationallization of certain assets are realized, Gudkov’s concern may be part of a larger issue as the newly formed security forces would have to be re-integrated with existing Russian security forces.

In June 2007, TNK-BP, a subsidiary of BP Plc agreed to sell its stake in Kovykta field in Siberia to Gazprom after the Russian authorities questioned BP's right to export the gas to markets outside Russia. On June 23, 2007, the governments of Russia and Italy signed a memorandum of understanding to cooperate on a joint venture between Gazprom and Eni SpA to construct a 558-mile (900 km) long gas pipeline to carry 1.05 Tcf (30 billion cubic meters) of gas per year from Russia to Europe.

The South Stream pipeline would extend under the Black Sea to Bulgaria with a south fork extending to Italy and a north fork to Hungary. Following the alleged violation of previous agreements and the failure of negotiations, on August 1, 2007 Gazprom announced that it would cut gas supplies to Belarus by 45% from August 3 over a $456 million debt. Talks are continuing and Belarus has asked for more time to pay. Although the revived dispute is not expected to hit supplies to Europe, the European Commission is said to view the situation “very seriously.”