friday fretting - the downturn continues

One of the things I have found most peculiar throughout this downturn in the oil and gas industry was how long it took SLB executives to admit how extended this downturn would be. It was only in October during the Q3 earnings call, was it finally conceded that the downturn would stretch well into 2016.

I'm not saying 'I told you so', but for as long as OPEC has held their line about not cutting production, the fundamentals were not favorable to a turnaround in oil prices. And OPEC has definitely been holding the line. A week ago, one of the representative nation ministers admitted there was "no ceiling now" the group affirmed the position they've held for the past year that there would be no cuts at this time. This is a position they have held since at least November of last year and affirmed again over the summer. If anything, member production will trend higher as individual nations in tough financial situations will inch up their production in attempt to make up for the low prices.

Frankly, most of the OPEC members have gotten sloppy and undisciplined over the sustained high oil prices. We have lived in a generally long term oil boom since the early 2000's. The 2009 blip, while noteworthy, was not driven by sector fundamentals. Instead, it was driven by a lack of available credit and while the price of oil underwent a sharp decline during that time, it ultimately made just as sharp a recovery. Oil exporting nations (many of whom are in OPEC) have used these fat years to push various domestic programs and subsidies to their populations as a way for leadership to maintain power, but now many are struggling. Venezuela is the poster child for this and now the country is roiling as a result. But it's not just Venezuela. By some estimates, many OPEC nations need substantially higher oil prices in order to balance their budgets. Some of them, like Saudi Arabia, have large cash reserves to fall back on during this time, but most do not.

With OPEC refusing (or unable to internally agree) to cut production, US shale has become the swing producer. And the US market is highly responsive to market conditions. However, already sunk costs and financial obligations make it reasonable for many producers to keep producing even at lower prices. US production technically peaked in March of this year, but it has remained stubbornly high despite $40/bbl pricing levels. However, the spread in YoY production is shrinking and getting close to prior year levels. It is almost certain that US 2016-Q1 production will be lower than 2015-Q1 levels. In fact, that cross-over may occur for the current quarter, but the data is not yet available.

US production will finally drop in 2016 so prices will bounce right back and that's what SLB had been expecting all along, right? Maybe. I won't pretend to know what the C-suite is thinking (other than "transformation") but it's pretty clear activity is not going to bounce back in early 2016. Part of the supply/demand problem is that even with reduced US production, others will increase production, especially Iran which is eager to get back to pre-sanction production levels. On the demand side, the outlook is also murky. Part of this year's demand has been goosed by countries taking advantage of low prices to top off their strategic reserves. China has been a big participant in this trend. That's unlikely to continue much further so what happens when everyone's tanks are full and the ships have nowhere to go because there are no buyers?

If I knew the exact answer, I'd be making a killing on the futures markets. However, it does seem like the grim reality has fully set in for the oil and gas services sector. In discussions with friends of mine still in the game, it looks very grim. In SLB's case, going from 120K to 80-90K people is a tough process to be a part of and I wish my friends luck through this coming round of cuts.

thursday's trawling - more cuts coming

Last week, Schlumberger Schlumberger announced another round of job cuts that would be coming soon. (Also here for a presentation from a top executive.) No number was provided for the number of of job cuts, but it can be estimated based on the $350 million restructuring charge that was announced as part of the cuts. At the beginning of the year, a $390 million charge was taken to coincide with 11,000 job cuts. If a similar cost/cut ratio holds, then this round will be good for about 10,000 more cuts.

Let's look at the numbers:
120,000 peak employment
-9,000 cuts in late 2014
-11,000 cuts in early 2015
-10,000 cuts in late 2015 and/or early 2016
_________
90,000 remaining employees

If anything, the 90K estimate is too high because of natural attrition and retirements which would have also occurred over the past year. The reality is that in a high turnover industry like oilfield services, this could account for another 5K-10K people. It is quite possible that when this is all said and done, roughly 1-in-3 people who were working for SLB in early/mid-2014 will no longer be there by the end of Q1-2016. In fact, there are two other factors in play which could make it feel even more severe:
1) Contractors - When times are good in the oilfield services industry, they are really good and it is nearly impossible to be properly staffed. (Definitely a post for another time.) Thus, contractors are hired to fill the gaps, but they come at a high short-term price. Everything was humming along quite well at the beginning of 2014 and there were probably several thousand contractors on the payroll (perhaps 5K, but I don't have a good estimate). When it is time to cut, the contractors are almost always the first to go. This population was never part of the employee figure and didn't have restructuring charges tied to it, but they were nearly all let go early on in the downturn.
2) Lower separation costs per person - Some of the early 2015 layoffs were almost certainly packaged retirement deals. I know for sure this happened in 2009 when several people I knew from my time working in New Mexico and Texas who were at or very near retirement age (and thus eligible for full pension) were given a separation package. Those packages would have been relatively expensive. This time around, the ready-to-retire and nearly-ready populations are probably very thin now and so oustings will come from much less senior employees. These will cost the company less on a per person basis. Thus, $350 million might end up being close to 12K or 15K job cuts when the smoke clears.

To an industry outsider, this might seem terribly harsh, but it is actually completely normal for the industry. Times are tough so it is time to retrench. If I told people in the Bay Area that every few years, there would be a tech downturn that would lead to 1-in-3 people getting canned, they would look at me like I was crazy. And they'd be right to do so. However, oil and gas (and any resource extraction business for that matter as the miners are also having a rough go of things) cannot innovate itself into creating more demand for its product.

tuesdays not in turkmenistan - long gone

Wait, there hasn't been a post in nearly 18 months. And I haven't been in Turkmenistan in over two years. Why this? Why now? I am long gone and I will not be going back. At this point, nearly all the other expats I worked with are no longer in Turkmenistan and I have minimal contact with anyone still there.

I have always pulled my punches with this blog. There was always a reluctance to write too critically about any location I was in, especially when I was in Turkmenistan (though the Turkmen President falling off his horse was too good to not write about). After all, it is essentially North. Korea. Lite. Perhaps I should say "was" since I haven't been there for two years, but my former colleagues have assured me it is as dysfunctional as ever.

Doing a quick check and review of an older post of mine on Turkmenistan's place in various rankings around the world, not much has changed. The country is still pulling in awful marks from essentially everyone:
* Human Rights Watch (Turkmenistan profile link)
* Freedom House (Turkmenistan profile link)
* Reporters Without Borders (Turkmenistan profile link)
* Transparency International (Turkmenistan profile link)
Yep, still not a great place when the only places you beat are Eritrea and the actual North Korea (as per the Reporters Without Borders report).

Turkmenistan's great struggle is not that it is terrible, but that it will continue to be terrible. It sits atop the fourth largest natural gas reserves (direct link to .pdf of the 2015 BP Statistical Review and go to page 20). But all this wealth will not reach the vast majority of the people while it has such a petty and vainglorious leader. Yes, petty enough to insist upon a yacht as a bribe. This was actually semi-openly discussed among expats in at least one of the client offices while I was there. It was never much discussed in front of Turkmen nationals since you could never be certain who actually supported the president as opposed to those who paid lip service to his ego-centrism. And with visas so difficult to come by and deportations so legitimate a threat, the trend was towards discretion around locals.

In the past, I was pulling my punches about the potential of the country. I laid out two main stumbling blocks to developing the country's resources: distribution of wealth and available labor. The labor issue is straightforward enough. People there are not well educated and the nature of the education they receive is very dogmatic and rigid. There are gains, but people will be educated only just enough to perform the work needed, not well enough to create what one might call a creative class. In its current form, the education system there will never lead to an innovative or entrepreneurial society. Additionally, Turkmen nationals need an exit visa to leave the country and get a foreign education. This further restricts which type (and how loyal) of a person is allowed out. As for the distribution of wealth, well, this report sums it up well when it says:
"Twenty percent of the Agency’s revenues go into the State budget. The other 80 percent disappear into the murky, shadow economy that President Berdymukhamedov has built though a legal, but highly unethical, system of law that he created under the noses of western officials, but which has never been analyzed, until now."

With leadership like that, Turkmenistan will never prosper. It will improve in some ways, perhaps many ways, but it will fall deeply short of its potential as long as it is led by such a petty and insecure person.

saturdays in sakhalin: hurricane?

Well, at least one outfit is calling yesterday's storm that, though I would call it a really windy storm. Here are some videos of some of the destruction wrought on Friday evening. the worst of the storm seemed to roll through from about 18:30 to 20:30 which happened to include the time of the day I walk home from the bus stop. Perhaps it would have been advisable to duck into the hotel bar near my bus stop and wait things out, but I wanted to get home so quick-stepped it through the mayhem. The wind was actually strong enough that I was forced to stop at one point, turn sideways, and lean into the wind to keep from being blown over. Perhaps it was a hurricane.

This storm did seem very out of character or at least I hope it was out of character because the city was not very well prepared, especially in terms of tree trimming and securing temporary construction siding. Lots of branches and metal sheeting were on the streets. One of the streets I walk along had broken windows on about half of the cars too. The real kicker was that I saw three different bus stops that had been blown over. Good times for being indoors, which is where I went and stayed Friday evening. My building seems to have been unscathed except for some minor exterior damage and some rain gutter getting ripper off. The proprietors of the shop next to my apartment were not so lucky. Not the best picture, but this tree is a good 15 inches across:

saturdays in sakhalin: in search of balance

Another Saturday, another day in the office. Of course, my employment contract does stipulate working 6 days per week, so my presence in the office today is perfectly normal, even expected. The real issue is what happens tomorrow. Another Sunday, another day in the office? Probably yes. We have still not gotten the staffing situation to the level it really needs to be at and it wears on everyone else as a result. I have been in this situation before. In the short-term, people can power through and operate like this for a few months. In the long-run, this is not sustainable. Not just for me (though I really don't ever worry about myself in this sense), but rather for the people who work lateral and below me. I am a shepherd of of sorts, though no biblical analogies are intended. This is what managing is though: tending to your staff, developing them, making sure the work is getting done, offering support, and every so often you lose people, sometimes at their own volition and sometimes at your own volition. I know I can only push people so hard before something gives. I have often wondered how hard I can be pushed. Very hard is my answer from experience, but my most difficult assignments have also been relatively short. I can sustain the pace for roughly a year so that's what I know I can do, but a single year is not a long-term solution. However, I have come to (somewhat) jokingly say that there are never the right number of employees. Either we have too many people relative to activity and revenue and need to transfer people out or we have too few people. We never have "Goldilocks" staffing levels because something is always changing. Thus, the only balance is dynamic, like moving back and forth to keep a pendulum balanced above its pivot.

saturdays in sakhalin: where winter just won't let go

I arrived back in Sakhalin a couple of weeks ago and the snow had melted, the air was warm (or at least warm-ish) and I even ran the AC one night. It looked like Spring had arrived. Nope, not even close. The next weekend, a storm rolled through town, cold enough to make me consider bringing the long underwear back into the wardrobe rotation. The storm even dumped some snow up on the top of the nearby mountains, though all we got at town-level was wind and bitterly cold sideways rain. Being the stubborn person I am, I have yet to purchase an umbrella and my decision has not left my too terribly soaked yet. (Hey, I made it through rainy season in Gabon without an umbrella so it'll take a lot more than that to force my hand now.) Since the storm, the weather has been holding relatively steady just above freezing and with enough wind thrown in that it cancels some of the chopper flights up north. This isn't a problem in town, but it really messes up the offshore work.

For now, I am waiting to see when Winter will release its grip. It needs to be soon since we are headed into "Summer Projects" season, a time of uninsulated shipping containers, surface work free of sea ice, and platform maintenance. All this is contingent on non-freezing temperatures or else we're going to have some problems.

saturdays in sakhalin: sweet, sweet bandwidth

One of the (many) things that ground my gears in Turkmenistan was the distinct lack of available bandwidth. It seems strange to gripe about something which didn't exist in any meaningful way just a few years ago, but it is amazing how quickly you both adapt and take things for granted. I came of age into adulthood roughly with the rise of the internet. I started to purchase my own air travel tickets and have always purchased online. Never used a travel agency, never called an airline (except for one unusual set of ticket change circumstances, but the point still stands). In my universe, basically everything can be done online. Banking, shopping, paying bills, writing nonsensical letters to the editor, getting movie tickets, booking hotels, renting cars, etc. Not only can i do these things, but i can do them quickly.

Turkmenistan was a different story. Things were slow and pokey. Very slow, very pokey. And also annoyingly censored. Not well censored, but annoyingly so to the point where it was a mix of comical and incomprehensible.

Sakhalin does much better. Much of it seems to be courtesy of the HSCS, which is short for Hokkaido-Sakhalin Cable System (opens as .pdf). (Prior to this discovery, my knowledge of Hokkaido was solely from the episode of The Simpsons where Homer thinks he is Mr. Sparkle from a strange detergent box found at the city dump.) The telecom cable even makes an appearance in this handy-dandy map of submarine cables. Suffice to say, I can go back to my more decadent internet ways with plenty of bandwidth now.

saturdays in sakhalin: sleds, for babies!

I've seen something quite amusing in a practical sort of way while walking about town. Baby strollers with sled rails instead of wheels. It makes perfect sense when you think about it. When the sidewalks are covered with snow and ice (and they are unless it goes several days without snowing and the plow people have a chance to clear the sidewalks), sled rails just make more sense than wheels. I only wish I could snap a picture without looking mildly threatening.

saturdays in sakhalin: where am i?

Short version: city = Yuzhno-Sakhalinsk; island = Sakhalin
Slightly longer version: People often refer to this place as simply "Sakhalin" and while that's sort of correct, that's not actually the name of the city. I'm in Yuzhno-Sakhalinsk, the largest city on the island of Sakhalin. The island is part of Russia's Far Eastern Federal District, though that was not always the case. It is worht noting that the Far Eastern Federal District is not part of Siberia. It's even further east as the http://en.wikipedia.org/wiki/Siberian_Federal_District>Siberian Federal District is to the west of this region. So yes, there is a place past Siberia, though it really depends on what direction you're travelling.

Why are we all here? For the eminently originally named Sakhalin-I and Sakhalin II projects. What can I say, people like functional names. Though apparently all the fields in the Sakhalin-I project are named after birds. Probably tasty birds.

life maintenance

Life maintenance is a catch-all term I use for the day-to-day tasks required to simply make it through the day in a reasonably comfortable manner. This is most assuredly a first-world problem sort of term since what I consider to be life maintenance is what much of the world might view as survival. I'm talking about cooking, eating, hygiene chores (shower, shave, laundry, dishes, etc), grocery shopping, and those sorts of routine tasks you do on a regular basis that are important but not necessarily interesting. (Yes, if you're really into what you eat, then food is important, but if it is simply a means to an end for sustenance, then it becomes a maintenance task.) While I view many of these as a minor annoyance, I have no doubt that many people would be thrilled to have these sorts of tasks as easily as accessible as I have them. Even less frequent but still ostensibly routine things like seeing the doctor or dentist fall under the category of life maintenance. I would argue that very few people are eager to go to the dentist, but most would recognize the importance of going and why it is something worth putting up with.

Life maintenance feels like a waste of time while it most certainly is not a waste of time. If I don't eat and bathe, then I'm probably going to run into some problems. It's not that I don't understand why these things are important, it's that they feel inefficient, as if there ought to be some way to speed things up. And this is part of what I have tried by living relatively simply. I don't spend much time cooking (and thus have minimal dishes to wash) by having simple or small meals. Not owning a car certainly cuts many life (and auto) maintenance tasks from my to-do list. And it's not like I suck at these things either. While I am no master chef, I am certainly capable of looking after myself and am reasonably sure that I do so at an above-average level, though I guess the average depends on the pool of people being considered. Regardless, it's not like I have some deep inability to operate a vacuum or washing machine or shave competently. To borrow a quote from Office Space, "It's not that I'm lazy, it's just that I don't care" and that best captures the essence of the problem. Well, assuming there's a problem. It's as if my approach is fundamentally wrong. All of these tasks have the potential to be fun and even challenging with the right outlook. And yet there are so many more interesting things to do.

the daily routine

I have now been in Yuzhno-Sakhalinsk for over a month now. Time to give a basic run down of what a normal day here is like. I get up, go to work, work, go home, sleep, and repeat. Exciting, isn't it?

Ok, I kid, I kid (sort of). The typical day is slightly more compelling, though I'm not sure what you expect. My first three weeks here were actually quite atypical because of both my arrival to the location and the holiday season. Being new always means a steep learning curve. While I'm still on the curve, it's not as steep as it was my first few weeks here. The holidays were interesting as well because January 1-8 was treated as a holiday for local staff (and so the office was basically gutted for an entire week and since that time period straddled a weekend, many people took a few extra days off at the beginning and end to take a full 16 days off from work (going from Saturday, December 28 to Sunday, January 12). Now things are more even, though we're in the midst of what I will obliquely call some lumpy staffing coverage owing to factors which regular readers (if any are left) will know I never provide details on. Suffice to say, this is the hand I inherited from my manager and predecessor and it's something that can be worked through.

The set-up here is quite good, at least in terms of convenience. I usually get up between 06:00-06:30 and stroll out the door by 06:50 to head toward the bus stop. My employer runs buses to the office/base facility since it is at the edge of town (and then some). On weekdays, the bus comes at 07:13 and I'm usually at my desk between 07:30-07:40 depending on the traffic (aka: depending on how much snow is on the ground). There is a later bus, but it arrives after 09:00 and is for shamefully late employees. Office work is office work, some people to meet, things to review, numbers to crunch, e-mails to ignore, etc. Lunch is provided in an on-site cafeteria. It's nothing fancy, but a nice warm meal does eliminate the need to put any time or thought into lunch plans. From a business perspective, it's really the only sensible thing to do. The base is several kilometers from shops and restaurants so on-site meals allow employees to spend more time at work and less time eating. Well, perhaps the same amount of time actually eating, but the one minute walk to the cafeteria is much shorter than the time it would take to go out to eat every day. At the end of the day, there are a few more bus options, leaving at five past the hour from 17:05 to 20:05. Want to stay later? Then you'll be taking a taxi home unless you have your own car.

About cars, I don't have one here. I could purchase one, but lack most of the reasons others have for doing so like family or living far away from the bus stops or a need for speed or desire to go off-roading or any of those sorts of things. A car would not simplify my life. It would moderately complicate my life. Sure, it would be convenient, but you know what's even more convenient? Not having to drive to work. I can sleep on the bus (or at least close my eyes since it is a very bumpy road), read, avoid any form of socialization with grim-faced Russians, etc. I never worry about parking, being too tired to drive, or ice on the roads. I have not had a daily commute in nearly three years and have not owned a car in more than five years. (In both Hungary and Gabon, I had an assigned company vehicle and drove myself to work.)

Regardless of my commute to and from work, I usually get home in the evenings, have a light dinner, water my plants, and consume some fiction-based media. It's as exciting as it sounds. Yes, I've been out a few times, but until our lumpy work coverage gets sorted out in a few weeks, I do not have much time for making it rain at da club. Seriously, the days here take on a routine, much like anywhere else. Routine drives most days, provides normalcy (and often sanity), and generally keeps things far less dramatic than they otherwise would be.

well, that fizzled out

I was genuinely eager to return to blogging upon my arrival to Russia. And then I had some trip delays getting out here and ended up stuck in Moscow a couple extra days. Then arrived here in the midst of holidays and several different personnel moves. And now I have settled into a routine at work that does not involve writing. Well, it involves plenty of writing, mostly of e-mails, but not of blogging in this space. And those are all excuses. Lame excuses at that. At the very least, I can console myself with the knowledge that I have spent my time on other tasks which mostly fall under the category of what I call "life maintenance". Thing like getting the new apartment up to snuff with light bulbs (so many light bulbs, to be explained another day), cleaning, and the purchasing of housewares and linens. I know, downright domestic. Plus, a fair bit of reading as I have been cruising through the very good Hyperion Cantos series by Dan Simmons. And those are yet more excuses, albeit slightly less lame.

Thus, here we are. The weather report today is moderately sunny during the day which made the daytime high of -11 degC seem more palatable. I ride a desk so it doesn't really matter and am generally outside all of 30 minutes a day, most of which is spent walking between my apartment and the bus stop. And blah blah blah and other useless drivel. You didn't come here for daily minutiae, though perhaps why else would you (family excluded of course) be reading some random person's blog. Time to start tapping and typing away.

actual first impression

I need to amend my previous post. My first impression upon arrival to Sakhalin was that there was only one conveyor belt in the baggage claim area. This was reminiscent of the airport in Turkmenbasy, Turkmenistan. It's quite a nice looking airport, see here and here. However, the Turkmenbasy airport has a single very long baggage claim conveyor. It snakes around an entire large room that must be close to 50 meters long. It baffles me why they'd make it like that when they could have easily had two (or more) shorter conveyors which would of course mitigate the problems whenever the conveyor needs maintenance. Anyway, that was such a typically Turkmenistan thing, to have something be deliberately fancy for the sake of fanciness (or perhaps an attempt at some obscure world record) that was ultimately not very practical.

Back to the topic at hand, the lonely single conveyor in Yuzhno-Sakhalinsk airport (IATA code is UUS for reference). This seems to have been borne more out of necessity given how tiny that room is relative to the number of passengers it is attempting to accommodate. Also, the passengers displayed the same poor baggage claim etiquette as nearly everywhere else I've been which is that they crowded around the belt and did not let anyone else in to reach their bags. This didn't really matter to me because my bags did what they nearly always do which is arrive almost last (but never get lost!) so they crowds had finally thinned by that point.

Bonus picture: Yuzhno-Sakhalinsk airport.

our long trans-national nightmare is over

I'm back. Now from Russia with Love. It works on two whole levels. Additionally, the title is an adapted version of the esteemable Gerald Ford's inauguration speech. Or perhaps that one classic speech from George W. Bush. It's sometimes hard to tell those great orators apart.

My days in Turkmenistan and its censorship of blogger.com and terrible bandwidth are over. I'm now in the fair city of Yuzhno-Sakhalinsk, Russia, a place seemingly near the edge of the Earth, which you'd think would be hard to find on a spherical body but yet here we are. I have been here nearly two weeks now. First impressions: there is snow, lots of snow and many of the cars are right-hand drive which is presumably a function of the the island's proximity to Japan. A bonus observation: I have heard fireworks every night I have been here, not just last night. The locals seem to really dig blowing things up. More to come soon. Maybe.

tuesdays in turkmenistan: the potential of Galkynysh

I have been sitting on this post for a couple weeks. Now that I'm back in the blogging spirit, this is a good time to post. It would have come out last week had it not been for my visit to Ashgabat last week. In fact, my visit was partially related to this subject, but alas, no further details can be provided on the matter.

There is a massive gas field in Turkmenistan called Galkynysh. The field, which used to be called Yoloten, is massive. One of the largest gas fields in the world ever to exist. If you have ever heard me speak about the potential of this country and where its financial future lies, it is this field I have in mind. It is the country's goal to produce gas from this field soon, and eventually reach quantities that will sustain pipelines to China, India, Europe and anywhere else they can find a market. Turkmenistan has the opportunity to become like some of the oil-rich Gulf nations. High resource wealth mixed with low local population means a very-high average standard of living can be achieved. There are two major social stumbling blocks in addition to the many technical and geopolitical ones. Only touching on the technical aspects briefly, I want to mention that this is not an easy field. Drilling will require a reasonably high level of technical sophistication. In terms of geopolitics, gas means pipelines for Turkmenistan as a land-locked nation (ignoring the Caspian). Pipelines need to be built and maintained. Ok, there's one to China now (in addition to the one through Kazakhstan and Russia). But building one to India, through Afghanistan and Pakistan, will not be easy and a trans-Caspian line to Azerbaijan and eventually Europe will also meet with resistance, mostly from Russia. I think these are actually all fixable problems. Some of it is technical, some is political, and money will carry the day to get things done.

Back to the social stumbling blocks. First, a high average standard of living does not mean a good standard of living for everyone. Some people will do very well, and there are always some who do exceedingly well for themselves in places like this, while others will do moderately well (ie: the future professional/middle class), and there will be those who do not fare so well. Perhaps progress will bypass their lives or social programs will not reach all corners of the country or perhaps plain old ethnic divisions will continue. Ashgabat has become a shining marble beacon already, but the rest of the country has yet to be so fortunate. How long and how extreme can the disparity become until it creates unrest? The next 10-20 years will be interesting to say the least.

The other social stumbling block is labor. As in, where does the labor come from? Does Turkmenistan want to go the same direction as some of the Gulf states and import significant amounts of expats? For its own sake, I think it should not and in practical terms, it may not be able to anyway. Countries like Bahrain and Qatar have less than one million citizens each, but have total populations that are more than half-expat. Saudi Arabia is the world's largest oil producer with less than a tenth the population of the U.S. (which itself produces more oil than most people realize). Turkmenistan, with 5-6 million residents does not seem eager to embrace significant amounts of outside labor. For sure it exists, as evidenced by significant numbers of Turkish construction projects. However, the Chinese, despite their investments into the country, have been rebuffed many times and only a limited number of visas are available for Chinese nationals to support the operations of the Chinese state company CNPC in the eastern part of Turkmenistan. And vast waves of cheap labor from India and Southeast Asia like you see in Bahrain, Qatar, and U.A.E., have yet to flood into the country. There are obvious hurdles in terms of getting visas, but additionally, local labor is still relatively cheap. The challenge lies with the quality of local labor. It would benefit the country to significantly invest in education and health services. The benefits are numerous: educated labor force, reduced population growth (which is rather high), and the ability to employ the nation's citizens in the nation's own projects. This allows more of the investment to stay in the country instead of going abroad with expats like myself.

There is so much potential here. Turkmenistan has before it so much opportunity, but fulfilling these opportunities depends on the people here, especially the political leaders.

tuesday in turkmenistan: neutrality monument (and a brief tour)

Finally! I have been in Ashgabat the last few days and a colleague who grew up in the city took me out on Friday after work to see some of the sights. One of our stops was the Neutrality Monument, formerly known as the Arch of Neutrality. It had been a place I wanted to visit since early on in my time here. It used to be in the city center, but was moved a couple years ago to its present location at the edge of the city. The construction company in charge of its move has some nice photos on their website. I took photos of my own, available upon request.

We went up to the observation deck near the top. There was also a museum level, but since we were there after 5pm, the museum was closed. The area is also surrounded by a nice park. Beyond the park, the area is part of the city where they have tried, with varying levels of success, to plant mass amounts of pine trees. This tree planting occurs in every city, but is particularly large in scale in Ashgabat. They are trying to green this desert landscape and it isn't easy. Regarding the monument, it is a bit absurd, though one could argue most monuments are absurd, especially from an outside perspective. I found the elevators that go up the legs to be quite interesting. The three legs are angled and two of them have a mechanical lift that goes up and down it like a very steep trolley. The third leg has actual stairs, though the stairs were closed during our visit. The lift is something like a cross between an elevator and an escalator (and it has no air conditioning). It also costs a reasonable 1 manat (about $0.35) per person. It's not clear if the stairs would have been free.

My colleague had a whole list of places to go, but some road closures prevented us from visiting some of them. In particular, we were turned away from the world's largest indoor Ferris wheel. It shall have to wait for another day. Instead, we went to a local park with statues of past historical figures from the country and did a driving tour of much of the city. There is a peculiar propensity to make official buildings in the shape of something related to its purpose. For example, the dentistry school has a curved top shaped a bit like a molar. The telecommunications building has the shape of something where you could hang a phone. The oil and gas building is shaped much like a cigarette lighter. The medical building has some twisting shapes similar to the serpents in the Cadeceus symbol.

If you live in Ashgabat, then you see a dramatically different place than what existed 10-15 years ago. Like many capital cities, much of the money from the country flows this direction. New construction abounds and many of the places we saw did not exist 10 years ago. This is what visitors see, or at least what they see first, when coming to Turkmenistan. A city of boundless construction and record-setting numbers of marble buildings. This image contrasts very sharply with what the rest of the country looks like and what another colleague told me a couple days ago. He said that outside of Ashgabat, people are not as happy. The money goes one way, towards the capital, and there are not rows of gleaming marble buildings in the rest of the country. Not yet, though probably not ever.

tuesdays in turkmenistan: wither JLo

Turkmenistan made it into the U.S. news cycle! Albeit, only because it involved prominent popular culture figure, Jennifer Lopez, often known as JLo (or less desirably as Jenny from the Block).

As has been reported in many articles, JLo performed a concert at a hotel resort area known as Avaza which is near the city of Turkmenbasy (which is about a three hour drive north-northwest of Balkanabat). Of course, with the reputation Turkmenistan, JLo was roundly criticized for the performance, which some claim she was paid upwards of $1.5 million for.

Is the apparent outrage with her performance justified? Can she (or her management team) claim to have not realized the nature of the performance, what the country is like, and that the President would be there? Going back to that first question, I'm not sure I really care about the outrage or whether people should be upset. Partly because I also work here, thus lending credibility/support to the regime and partly because this is how capitalism works. You pay someone for a service or product and they provide said items. Is it blood money or something terrible? Well, probably, sort of, indirectly yes. The advantage for me is that I am but one tiny blip in the NSA's PRISM net and I do not work in an industry where public sentiment of me, as in my individual self, matters. JLo's professional well-being relies on her being popular and inoffensive enough to avoid any public outcry.

Now going back to that second question (or really set of questions) from the previous paragraph. Should JLo and her team have known better? I think so, but I am also far more familiar with the affairs of Turkmenistan than the average person, though that does not take much. Part of it will depend on just who they interacted with to organize the event. Was it with CNPC as most articles state? If that's the case, then they should have done some basic research into what CNPC does (oil and gas), where they are from (China), who owns them (Chinese government), and what specifically CNPC was doing organizing a party in Avaza. Perhaps not known to Team JLo, but CNPC operates on the other side of the country. But Avaza is the crown jewel of Turkmenistan vacation spots, or at least that's what the billions the Turkmen government puts into the project want it to be, so perhaps it's just a good place to have a party. What is generally well-known within Turkmenistan is that the President loves to have his picture taken. After all, he's on the front page (above the fold!) of the national paper every single day. He also likes to be at major events, in this case, the grand opening of recently-completed parts of Avaza. To everyone in Turkmenistan, it is totally logical and expected the President would be at such an event. To people on the outside, especially Americans, it seems odd, arguably unexpected. After all, U.S. Presidents do not show up to the grand openings of every major construction project. However, the comparison is best made to a state or large city, something with a population similar to Turkmenistan's roughly 5 million. Would the mayor or governor appear at such an event? Sure, there is a decent chance for an appearance. And is getting JLo to perform for the President effectively a subtle bribe by CNPC? Well, it's not even subtle, though not as blatant as gifting him a yacht or whoever bought him this Bugatti. JLo's presence both strokes his ego and gives him more legitimacy, as if to say, "See, big American stars sing Happy Birthday to me so I can't be a bad guy."

Quite interestingly is the reaction from people here who are reading about this. Understandably, many people, especially the younger women, were excited that JLo, as an internationally known entertainer, came to their country. This is a big deal to them as it somehow validates the importance of the country along with the validation it provides to the President. What locals here seem more surprised by is the characterization of their country as an oppressive dictatorship with in-name-only democracy and a poor human rights record. They find this so surprising because it is simply not true for much if the nation. Well, the in-name-only democracy part is true for everyone. After all, after the previous President died, the current one became interim President through the magic of having the person who was supposed to be the interim President arrested along with many others. Then, he changed the constitution to allow himself to run in the next election since the previous constitution forbade interim President's from becoming elected. And Bob's your uncle. Anyway, people here were surprised because conditions here are improving. In the immediate aftermath of the dissolution of the Soviet Union, the Central Asian countries in particular badly struggled. So far from everything, very poor, and often reliant on Russia for contact with the West. The country struggled for several years, but has slowly been gathering wealth from its natural resources. Of course the wealth is not evenly distributed, but most people are seeing basic needs (ie: housing, food, gas) provided so they are happy enough and certainly see the improvement in very real and important terms. Even if the political leadership siphons the vast majority of the money away and corruption is rampant, conditions today are still much improved from what they were 10-15 years ago.

As for JLo and her supposed moral dilemma. She can donate her concert fee to charity, take the write-off, reap the positive press benefits and move on. Or she can wait it out and Americans will find something else to care about for 15 minutes.

a June wash

Whelp, June has become a wash of no posts. This issue with the censorship and needing to do some VPN hoop-jumping has deeply dampened my interest in writing. I end up with all these ideas and then go to this page and of course it is blocked. I really need to be writing posts offline and then doing the hoop-jumping at a more convenient time. The problem is compounded by two other things. First, I was home part of June and I oddly don't blog much while home. It's a mix of being busy with more interesting things and simply from being incredibly tired. Finding energy while home is never easy since the work never quite goes away and is always there in the back of my mind. This brings me to the second item which is work itself. I am busy. Perhaps not in a way that translate to lots of revenue for the company, but it feels like I am much busier at work than I used to be. Things are always in transition, but this is more transition-y than usual and I feel like I'm running hard just to stay in place.

tuesdays in turkmenistan: all the king's men

Well, the VPN technology is not perfect and the connection is not entirely reliable to begin with.

Continuing where we left off, there was some amusing fall-out after the President's misadventure with the horse. Unsurprisingly, there were some local attempts to halt dissemination of the President's rendition of something that was not Gangnam Style. It's not clear how many days this went on for, perhaps only one or two because the videos spread quickly, but there were attempts to stop dissemination of videos at the airport. We had a few employees who were flying out the next day and they affirmed that they were also searched at the airport, made to login to their computers, and then their recently accessed pictures and videos were reviewed. Of course, much like in the EurasiaNet article, the airport personnel did not do a very thorough job of checking. One colleague told me he simply logged in under the generic username available on all company laptops. Logging in like this only shows default files and no pictures or video other than whatever Windows7 comes preloaded with. Not the most tech savvy group of individuals.

Ever since I heard about the attempt to halt dissemination, I have made it a point to try and show the video to as many people as possible. First, it is a hilarious fall. How often do you get to watch the leader of a nation face plant into the ground? If this happened in the U.S., it would be making every single news and semi-news program. Second, the race is obviously staged. You can clearly see the second place rider gaining on him easily towards the end. He was no doubt holding back until nearly the end. Frankly, everything about the Presidency here is staged. It makes for great theater to outsiders and deep reluctance to discuss it with locals. Third, Streisand Effect, enough said. Fourth, the attempt to stop distribution was so ham-handed, it pretty much typifies all that is wrong here. Fifth, there is apparently a rumor going around that it was not actually the President riding the horse. Evidently, this is some sort of attempt to make it seem like he did not fall off the horse, though it would imply that he's pathologically obsessed with his image. Well, it doesn't imply that at all. It makes it very, very clear.

Anyway, please watch the video. Find it on YouTube, go to the links above, something. It is hilarious.

tuesdays in turkmenistan: VPN

And I'm back and in Turkmenistan brought to you courtesy of the magic of VPN. However, I'm still at a total loss for writing topics. Fortunately, my good friend went on a bit of a horse riding adventure and took quite a tumble two days ago. Unsurprisingly, no one here has heard about the spontaneous dismount from the noble steed.

The censorship here is a peculiar thing. They block entire domains at a time, but not necessarily the mobile app versions of those same services. For instance, while Blogger on the web is normally blocked, the Blogger app works. Same goes for Twitter where the app works (but will not load pictures), but the website is blocked. There are some apps that are blocked, though only ones that can be used for chatting or have a heavy chatting component are blocked. It is a continuously evolving process. Program you use to chat with friends is blocked? Everyone migrates to something else until the censors catch on and block it as well. And repeat.