German oil and gas firm to pull out of Turkmenistan over bureaucracy and corruption

By bne IntelliNews October 29, 2015

Hamburg-based oil and gas company DEA Deutsche Erdoel intends to relinquish exploration concession in Turkmenistan’s Caspian Sea shelf over frustration at excess bureaucracy and corruption, the news website Alternative News of Turkmenistan (ANT) (, run by exiled opponents of the Turkmen regime, reported, citing anonymous sources in the Turkmen presidential administration.

Foreign investors tend to be discouraged by Turkmenistan’s methods of state-control, restrictions in the currency exchange system, excessive and inconsistent regulations, corruption in the government, the lack of an established rule of law, as well as the lack of experience in international business matters, according to a recent market analysis by the trade division of Spanish bank Santander.

DEA AG plans to end its commitments at its Block 23 concession, where the company was granted exploration rights under a production sharing agreement in 2009. The company has grown tired of “bureaucratic complications” in the country, which for more than two years has been failing to grant the exploration drilling permits despite the completion of all the four-year preparatory works envisaged in 2009.

Turkmenistan's State Agency for Management and Use of Hydrocarbon Resources under the Turkmen president insisted on dragging out the process for issuing drilling rights, which partially could have been due to Block 23 being adjacent to the Hazar natural gas reserve, the report said. 

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