Turkmenistan Abolishes Two Energy Agencies

Turkmenistan, which is home to the fourth largest natural gas reserves on the globe has abolished the Ministry of Oil and Natural Gas, and the State agency for Managing Hydrocarbon Resources; the two government agencies that oversee the resource, the export of which comprises approximately one third of that nation’s economy.

The move was ordered by President Gurbanguly Berdymukhamedov, ostensibly to improve the management and oversight of the natural gas sector. However, there is the possibility that the move is part of an overall concern of the decrease of natural gas prices in the global market.

Some of the functions that had been part of the Oil and Natural Gas Ministry’s oversight will be assigned to a cabinet department which answers to vice premier Yagshigeldy Kakaev, who oversees the nation’s oil and gas complex. Other duties will fall under two of Turkmenistan state energy concerns: Turkmengaz and oil company Turkmennebit.

Turkmengaz will be the state representative for the production sharing agreements in the development of the Bagtyyarlyk gas field and Block 1, an offshore gas and condensate block.

Before it was abolished, the Ministry of Oil and Natural Gas had announced last week that it would increase drilling in the Galkynysh gas field. Gas fields in that field are experiencing high output. A single well in the Galkynysh produces approximately 60 to 70 million cubic feet per day.

With the adjoining Yashlar and Garakel fields, there are an estimated 970 billion cubic feet of reserves in the area. When finished, the project would allow the country to produce 3.3 billion cubic feet of natural gas per year.

Turkmenistan has been the force behind the construction of a pipeline that will transport natural gas to India, Pakistan and Afghanistan. The Galkynysh would serve as the resource base for that pipeline which will stretch 1,127 miles. Berdymukhamedov had already approved the cost for the project at $45 million.

Initial construction work has already begun.

Lincoln Brown for Oilprice.com

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