Turkmen officials have floated ambitious plans for over $45 billion in investments in the country's oil and gas sector. To realize this goal, Turkmenistan faces a considerable challenge in attracting foreign investment. A recent conference in Ashgabat was designed to help lure investors, but many corporations remain hesitant to commit substantial amounts of capital to the Central Asian nation.

Participants at the May 28-29 roundtable conference heard Turkmen oil and gas officials outline a proposal for a $45.7 billion investment program that would cover 2002-10. As much as $34.4 billion of the overall total would need to come from foreign investors. Some industry experts wondered whether the Turkmen investment goal was realistic, as, according to the European bank for Reconstruction and Development, foreign direct investment in Turkmenistan was only $89 million in 1999 and $100 million in 2000. Representatives from Turkmenneftegaz at the roundtable, moreover, were unable to come up with specific details about investment needs when questioned by representatives of foreign companies.

The lack of answers, however, didn't deter Turkmen officials from aggressively courting investors at the conference, held under the auspices of the country's Ministry of Oil and Gas. Participants focused on technological requirements, industry priorities and scope of investments. The conference also examined prospects for developing the equipment and service markets.

According to a spokesman of one of the organizers of the event, the CWC Group, about 150 people attended the roundtable, 30 from abroad. The fact that participants included representatives from major oil companies, including ITERA, the Royal Dutch/Shell, Burren Resources Petroleum Ltd. and the Malaysian giant Petronas, indicates that foreign conglomerates are not willing to dismiss investment possibilities in Turkmenistan entirely.

According to data from the country's Oil and Gas Ministry, Turkmenistan produced 51.3 billion cubic meters of natural gas in 2001. The government has further targeted a 70 percent rise in oil production this year – from 161,000 barrels per day to 270,000.

Investors have so far been deterred by the country's lack of reliable energy export routes. The country's complicated investment climate has also exasperated potential foreign investors.

"Turkmenistan has no direct access to world markets by sea. Therefore, the realization of this country's great potential as an exporter of hydrocarbons depends to a large extent on the existence of stable long-term arrangements for the transit of its energy resources via the territory of neighboring states," Secretary General of the Energy Charter Secretariat Ria Kemper told the conference audience.

The fact that Turkmenistan "is largely reliant for its exports on the energy transportation systems of Russia and, to a lesser extent, Iran