GGP: Influential Turkmen Energy Chief Fired For Failing To Achieve The Unachievable

The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.

This was originally published by Qishloq Ovozi, a blog by RFE/RL Central Asia specialist Bruce Pannier on April 6, 2017. 

In a surprise move, Turkmen President Gurbanguly Berdymukhammedov has sacked the head of the country’s oil-and-gas sector, Yashygeldi Kakaev.

Berdymukhammedov presided over an April 5 government session where ministers reported on results for the first quarter of 2017.

Kakaev reported increases in the production of oil, gas condensate, and refined petroleum products. He said production of natural gas was at approximately the same levels as last year. And he added that investment in the oil-and-gas sector increased by 16.5 percent in the first three months of this year.

Turkmenistan’s government website Golden Age reported, "Having listened to the report, the head of state, Gurbanguly Berdymukhammedov, said there had been a weakening over control of realizing the program for development of Turkmenistan's oil-and-gas industry for the period up to 2030."

The Turkmen president then dismissed Kakaev and replaced him with Maksat Babaev, head of the state gas company Turkmengaz, also a veteran figure in Turkmenistan’s oil-and-gas sector.

Kakaev has been one of the top figures in Turkmenistan’s oil-and-gas industry for more than a decade, and for most of those years that sector was the driving force behind double-digit economic growth in Turkmenistan.

For approximately the last three years, the opposite has been true, though Kakaev could hardly be blamed.

The price of gas is about half of what it was at the start of 2014. Turkmenistan’s insistence on maintaining prices as close to pre-2014 levels as possible, a decision in which Berdymukhammedov undoubtedly played some part, has led to Turkmenistan losing Russia and Iran as customers since the start of 2016.

Luca Anceschi, a professor of Central Asian studies at Glasgow University, said, "Kakaev’s dismissal certifies the ultimate failure of Berdymukhammedov’s energy policy."

Anceschi added, "It is a sign of regime denial, as Kakaev’s failures are not attributable to personal shortcomings. They relate most directly to the implementation of a policy course that was flawed at its very onset."

John Roberts, a nonresident senior fellow at the U.S.-based Atlantic Council’s Dinu Patriciu Center, has met Kakaev several times.

Roberts describes Kakaev as "extremely dutiful" and "very conscientious about his work." Roberts said, though, that Kakaev had "the toughest job in Turkmenistan, after the presidency," in trying to get Turkmenistan’s gas sector back on track despite enormous challenges, most of which were far outside the ability of anyone in Turkmenistan to control.

Kakaev was not cast out in shame. He moves over to head the Galkynysh gas field, which Roberts reminded is "the world’s biggest onshore gas field."

Despite Kakaev retaining a key position, the decision to relieve him of his duties as head of Turkmenistan’s oil-and-gas sector appears to be the same sort of reshuffling Berdymukhammedov has resorted to numerous times in the last couple of years to reinvigorate the country’s moribund economy, which is dependent on gas exports for revenue.

These reshuffles do not appear to have produced any noticeably positive results to date, and the transfer of an experienced oil-and-gas sector official such as Kakaev is not likely to help the situation either.

The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.