Canadian oil company Tethys Petroleum announced a few weeks ago that they think they may have identified what they believe to be significant gas and oil fields in Tajikistan:
The initial analysis of the data from the aerial graviometry survey completed at the end of 2011 revealed several attractive prospective areas with the potential presence of very large deep sub-salt and sub-thrust prospects within the Bokhtar Production Sharing Contract (“PSC”) Area. The additional seismic about to be acquired will target these areas and provide the final data in a comprehensive programme to optimally locate a deep well.
This final stage of the seismic programme will involve the acquisition of new seismic in two areas; the Vaksh valley and the Dushanbe Step. The programme has been designed to target these areas as the graviometry survey and other data have identified them to be the most likely to contain large deep prospects including potential Jurassic reefs located on the edge of likely Permian basement high features.
The find is important for several reasons, both good and bad. Most importantly, Tajikistan’s economy is not doing very well. According to the World Bank, the poverty rate hovers around 50% (though that is a dramatic improvement from the 72% poverty rate in 2003). the Tajik Ministry of Foreign Affairs recently announced a new visa regime, which eliminates the need for a visa within the OECD. The intent is for visa-free travel to prompt more tourism, and thus more hard currency, for Tajikistan’s economy.
Tourism alone won’t boost Tajikistan’s economy. The business environment in Tajikistan is fledgling but it’s still growing (I interviewed the fascinating Chairwoman of the National Association of Small and Medium Business of Tajikistan, Matluba Uljabaeva, last November). But small businesses — the majority of Tajikistan’s economic activity — also won’t boost the economy. That’s where the excitement over the Tethys find comes into play: it has the potential to transform the country from unremarkable in terms of energy resources to, possibly, a globally significant one. And as Kazakhstan has found out over the last decade, oil means money.
That doesn’t mean oil will going to be good for Tajikistan. For years, Tajikistan has been embroiled in a very angry dispute with its neighbors over its domestic energy development. The Rahmon government has decided that the enormous Rogun hydroelectric dam, east of Dushanbe, is the key to solving its constant electricity shortages; Uzbekistan, however, thinks the dam will ruin its agricultural sector, which relies on the river Rogun will stop up for power generation (Uzbekistan relies on the river for its cotton production, which is both abusive towards the children forced to work in the fields and a major sector of the Uzbek economy).
Fozil Moshrab, an analyst based in Tashkent, notes how the prospective energy finds might affect the Tajik-Uzbek dispute:
Until now, Tajik officials’ trademark rhetoric has been that Tajikistan has no other option but to develop its hydroelectric power generating capacity as the country is not endowed with other alternative energy resources such oil and gas…
The discovery of large quantities of oil and gas will significantly weaken the Tajik government’s previous position such disputes, as its “no other option” argument will no longer be valid.
However, the government of Tajikistan has also negotiated a rail-and-energy agreement with Iran and Afghanistan. Under that agreement, which traded Tajikistan’s water in return for Iranian energy (while Afghanistan gets to benefit from both by being a transit country). Under that agreement, Tajikistan would send drinking water to Iran, which would in turn send back gas and oil. If Tajikistan has its own vast supply of energy, it’s unclear if or how that agreement will be affected in the long run (in the short run, all three countries still benefit from the trade agreement).
All of this depends on the oil and gas actually existing — and despite the promise of the seismic surveys, Tethys still needs to drill some holes in the ground to see what is really there.
Tajikistan’s fledgling energy development is happening mostly in the western half of the country. In the eastern part, there’s been all that instability in Khorog to contend with. It might be over, at least in large part: the warlord responsible for last month’s fighting, Tolib Ayombekov, has reportedly surrendered.
Speaking on television in Gorno-Badakhshan province, Ayombekov said he was giving himself up for the good of the nation, and urged other militants to lay down their weapons as well, the Khovar state news agency reported on August 13.
The warlord is injured and being treated in a hospital. Upwards of 70 people were killed in the fighting; at least three senior rebel leaders remain on the run from authorities.
The key thing to watch over the next several months will be Ayombekov’s trial. It’s unclear if he’ll really get a fair trial; those are pretty rare in Tajikistan. If he doesn’t get a fair trial, it could reignite the unrest near Khorog, leading to further violence.
This is Tajikistan today: a fascinating, worrying mix of unrest, mineral wealth, and — oh yeah — drug smuggling. It is a country with much promise, even if many of those promised have been broken over the last 15 years. And with the new oil and gas finds of the last few weeks, it looks set to become much more interesting.