Table of Contents

Introduction: Turkmenistan's Oil and Gas Industry 10
Chapter 1. Management of the Oil and Gas Industry14
1.1. Regulatory Bodies 14
1.1.1. State Agency for Hydrocarbon Resources Management and Use under the President of Turkmenistan 14
1.1.2. The Government 15
1.1.3. State Concerns and Corporations . 15
1.2. Licensing of Activities 16
1.3. Agreements . 17
1.4. Rules for Conducting Oil Operations 18
1.5. Pipeline Transport. 18
1.6. Taxes and Other Payments . 18
Chapter 2. Turkmenistan's Oil Industry 20
2.1. Oil Reserves Base 20
2.2. Oil Production .21
2.3. Industry Structure: Producers . 22
2.3.1. Turkmenneft 24
2.3.2. Projects with Foreign Participation 27
2.3.2.1. Khazar 27
2.3.2.2. Nebitdag 29
2.3.2.3. Cheleken . 31
2.3.2.4. Block-1 34
2.3.2.5. Combined Block 11/12 37
2.3.2.6. Other Offshore Blocks 38
2.3.3. Oil Refining 40
2.3.4. Oil Transportation Infrastructure. 43
2.3.4.1. Pipeline System 43
2.3.4.2. Sea Terminals 44
2.3.4.3. Railway Transportation 45
2.3.5. Exports of Oil and Oil Products 46
2.3.5.1. Oil Exports 46
2.3.5.2. Exports of Oil Products 47
Chapter 3. Turkmenistan's Gas Industry 50
3.1. Brief History . 50
3.2. Natural Gas Reserves, Development Potential 53
3.3. Territorial Distribution of Resources/ Gas Reserves . 56
3.4. Gas Industry Structure: Key Players and Projects . 57
3.4.1. Turkmengas 58
3.4.1.1. Dauletabad . 58
3.4.1.2. Malai 58
3.4.1.3. Garabil-Gurrukbil . 59
3.4.1.4. Right Bank of Amu Darya River. 60
3.4.1.5. South (Gunorta) Yoloten-Osman 61
3.4.1.6. Yashlar . 63
3.4.1.7. Zeagli-Darvaza . 63
3.4.2. Turkmenneft 66
3.4.2.1. Korpedzhe 66
3.4.2.2. Other Fields 67
3.4.3. Projects with Foreign Operators. 67
3.4.3.1. Bagtiyarlyk (onshore) 67
3.4.3.2. Nebitdag (onshore). 69
3.4.3.3. Block-1 (offshore) 69
3.4.3.4. Cheleken (offshore) 70
3.5. Gas Processing . 71
3.6. Gas Transportation Infrastructure 72
3.7. Export pipelines . 73
3.7.1. CAC-1, 2 and 4 . 73
3.7.2. CAC-3 (Okarem-Beineu) 74
3.7.3. Korpedzhe-Kurt-Kui. 74
3.8. Program for Development of Transportation Infrastructure 75
3.8.1. Existing Infrastructure 76
3.8.1.1. Turkmenistan (Deryalyk)-Europe 76
3.8.1.2. Pre-Caspian Gas Pipeline 78
3.8.2. New Gas Transportation Routes 80
3.8.2.1. Turkmenistan-China Gas Pipeline 80
3.8.2.2. Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline 80
3.8.2.3. Trans-Caspian Gas Pipeline 82
3.8.3. Export Directions: Potential Capacities 83
3.8.3.1. Northern Export Direction . 83
3.8.3.2. Southern Export Direction 86
3.8.3.3. Eastern Export Direction 87
3.8.3.4. Western Export Direction 88
Chapter 4. Scenarios of Gas Production and Exports from Turkmenistan .90
4.1. Methodology 90
4.2. High Scenario . 93
4.2.1. Production 93
4.2.2. Exports 94
4.3. Moderate Scenario 97
4.3.1. Production 97
4.3.2. Exports 98
4.4. Low Scenario 101
4.4.1. Production. 101
4.4.2. Exports 102

Tables
Table 1. Comparison of reserves and production of liquid hydrocarbons and natural gas in Turkmenistan, Azerbaijan, Kazakhstan, Russia and Uzbekistan.11
Table 2. Key provisions of development program for Turkmenistan's oil and gas industry through 2030 .12
Table 3. Milestones in the development of Turkmenistan's oil and gas industry 12
Table 4. Recoverable oil and condensate reserves in the Cheleken contract territory 31
Table 5. Primary refining and production of main petroleum products at the Turkmenbashi and Seidi Oil Refineries, '000 tons41
Table 6. Turkmenistan's Oil Pipelines: Key Parameters44
Table 7. Oil products exports from Turkmenistan, ¡®000 tons 48
Table 8. Initial reserves of Turkmenistan's key fields put into production during the Soviet period .50
Table 9. Gas reserves of major onshore fields in Turkmenistan (as of the beginning of 2006)*54
Table 10. Gas reserves estimate for South Yoloten and Yashlar, trillion cubic meters .56
Table 11. Expected gas production volumes of foreign operators, bcm71
Table 12. Key characteristics of Turkmenistan's export gas pipelines 75
Table 13. Turkmenistan's full (hypothetical) levels of gas production and exports, bcm91
Table 14. Turkmenistan's gas balance in 2008-2020. High scenario, bcm .96
Table 15. Turkmenistan's gas balance in 2008-2020. Moderate scenario, bcm.100
Table 16. Turkmenistan's gas balance in 2008-2020. Low scenario, bcm 104

Charts
Chart 1. Oil production in Turkmenistan*, thousand tons. 21
Chart 2. Oil production at onshore and offshore fields in Turkmenistan, 2008, % 22
Chart 3. Operators of Turkmenistan's oil/ oil and gas projects 23
Chart 4. Gas condensate production by Turkmengas, ¡®000 tons . 24
Chart 5. Oil production by Turkmenneft's production units, ¡®000 tons 26
Chart 6. Oil production at the Khazar contract territory, '000 tons per 28
Chart 7. Oil production at the Nebitdag PSA, ¡®000 tons 30
Chart 8. Oil production in the Cheleken contract territory, ¡®000 tons 32
Chart 9. Dragon Oil's planned investment in 2H 2008 and 2009*, $ million 33
Chart 10. Liquids production at the Block-1 contract territory, ¡®000 tons 37
Chart 11. Oil Exports from Turkmenistan, million tons 46
Chart 12. Gas production in Turkmenistan from 1992 to 1999, bcm 52
Chart 13.Gas production in Turkmenistan from 2000 to 2008, bcm 53
Chart 14. Turkmenistan's gas reserves estimates (tcm) 54
Chart 15. Onshore and offshore gas distribution 56
Chart 16. Gas production by state concerns, bcm 57
Chart 17. LPG production at gas processing facilities*, ¡®000 tons per year. 72
Chart 18. Gas supplies from Turkmenistan in 2000-2007, bcm 84
Chart 19. Outlook for gas production in Turkmenistan to 2020, High scenario, bcm . 94
Chart 20. Outlook for gas exports from Turkmenistan 2009¨C2020, High scenario, bcm 95
Chart 21. Outlook for gas production in Turkmenistan to 2020, Moderate scenario, bcm 98
Chart 22. Outlook for gas exports from Turkmenistan in 2009¨C2020, Moderate scenario,bcm 99
Chart 23. Outlook for gas production in Turkmenistan to 2020, Low scenario, bcm 102
Chart 24. Outlook for gas exports from Turkmenistan in 2009¨C2020, Low scenario, bcm  103

Maps
Map 1. Block-1 contract territory35
Map 2. Licensing blocks in Turkmenistan's sector of the Caspian Sea.39
Map 3. Turkmenistan's oil pipeline system43
Map 4. Gas transportation infrastructure from fields in Eastern Turkmenistan60
Map 5. Geological profile of South Yoloten-Osman field 61
Map 6. South Yoloten-Osman field.63
Map 7. Zeagli-Darvaza group fields65
Map 8. Bagtiyarlyk contract territory 68
Map 9. Routes of operating gas pipelines 74
Map 10. Bypass pipelines near Khiva 77
Map 11. Pre-Caspian gas pipeline route 79
Map 12. Turkmenistan-China gas pipeline 80
Map 13. TAPI gas pipeline .81
Map 14. Trans-Caspian gas pipeline.83