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Kazakhs, Turkmen Head To OPEC Meeting With Own Aims

by May 18, 2017 Key Issues

the December meeting, but Reuters’ sources in OPEC seemed certain Turkmen representatives would be at the meeting and would back additional cuts to oil production.

That might not mean much, since Turkmenistan only produces some 250,000 bbl/d. To put that into perspective, Saudi Arabia produces some 10 million barrels per day even after the agreeing to cut some 500,000 bbl/d.

Turkmenistan is a natural-gas producer, and since the price of gas on world markets follows the price of oil, Turkmenistan stands to gain if oil prices increase.

That would be one reason for Ashgabat to show its support for cuts in oil production.

But there is possibly another reason. Turkmenistan has been desperately seeking investors for its planned gas-pipeline projects so the country can export more of its gas.

Ashgabat has reached out, unsuccessfully, to Saudi Arabia, even to Qatar, itself a gas producer, looking for funding for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

Ashgabat assumed responsibility for coming up with 85 percent of the money for the estimated $10 billion TAPI project, and reports from Turkmenistan over the last year show the country is in no financial condition to pay that money on its own.

Turkmen authorities might be thinking there could be some quid pro quo here, and offer up support for oil cuts in the hope that one or more of the oil-exporting countries might be interested in helping finance a Turkmen export pipeline project.

So Kazakhstan goes with tepid enthusiasm for further production cuts, knowing the country will not go along with reductions much longer, whereas Turkmenistan goes with really nothing to lose and possibly something to gain by agreeing to anything the oil-exporting countries wish to do.

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