Thursday, December 2, 2010

YACHTS, AGRI-BIZ, AND WIKILEAKS

Got around to exploring WikiLeaks.org this morning. Some of the cables read like spy thrillers! In the one below, a 60 million euro yacht is gifted by a Russian company in exchange for possible rights to drilling for oil or, it is speculated, for selling tractors or starting a chicken farm in Turkmenistan. Global agri-biz is so much more exciting than I realized.

¶1. (C) SUMMARY: According to expatriate sources in Ashgabat, a yacht that recently set sail on the Caspian Sea -- reportedly worth 60 million euros -- is actually a gift from Russian company Itera. Itera is working on signing a deal jointly with Russian state-owned companies Rosneft and Zarubezhneft and Turkmenistan’s Turkmenneft to develop blocks 29, 30, and 31 in the offshore Caspian area at some point in 2008. According to news reports, Itera is also an enthusiastic partner in the development of the Avaza free tourist zone located on the Caspian Sea, is funding the Ashgabat branch of the Gubkin Oil and Gas University, and is involved in importing farm equipment from Tatarstan, in competition with John Deere and Case New Holland equipment. In addition, the government forced a Swedish-owned shipping company to give up seven of its most valuable employees to become permanent crew on the yacht. Itera’s business activities are wide-ranging and difficult to isolate, and the reported gift of the yacht serves as a sign that the company’s willingness to go to great lengths to win business should not be underestimated.

¶8. (C) COMMENT: Itera has a deal to build a urea/ammonia plant, and also an $8 million deal for ambulances, but there are most likely other deals of which post is not aware. The company undoubtedly really wants a gas exploration contract, especially onshore, and the gift of the yacht is a nice enticement to move the process along. As local businessman XXXXXXXXXXXX said, “The gift of a yacht might be for an onshore gas deal, a chicken farm, or works already in progress. Nothing is free in this country.” IPC Group, official distributors of John Deere and Case New Holland equipment in Turkmenistan, have had concerns about Itera and the company’s ability to take over the farm equipment market in Turkmenistan at least since Berdimuhamedov’s visit to Tatarstan. Itera’s business activities are wide-ranging and difficult to isolate, and the reported gift of the yacht serves as a sign that the company’s willingness to go to great lengths to win business should not be underestimated. END COMMENT. CURRAN

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