OREANDA-NEWS. BMI View: Turkmenistan's actual gas production will remain limited by its limited export options. With Russia and Iran increasingly reducing imports of Turkmen gas and with other large-scale exports (notably TAPI) unlikely to materialise over our 10-year forecast period, the country's production will remain almost entirely dependent on domestic consumption growth and export levels to China.

- A renewed emphasis on international investment, along with developments by Turkmennebit, has lead to a slow but progressive increase in oil production. This will endure over the coming years. Larger production growth within our forecast period, however, is unlikely until a sustainable agreement is reached between Iran, Turkmenistan and Azerbaijan on the Caspian maritime border dispute.

- The difficult business environment could, however, dissuade international investors, notably at a time of capital expenditure cut backs as oil prices remain low. For example, German company DEA Deutsche Erdoel is reportedly planning to relinquish its Caspian Sea concession as of October 2015 over frustration at excess bureaucracy, corruption and a lack of permit granting.

- Despite its large gas production potential, Turkmenistan's actual production will remain limited by its export options. With Russia and Iran increasingly reducing imports of Turkmen gas, the country's production will remain almost entirely dependent on domestic consumption growth and export levels to China. With economic slowdown in China and Russia quitting Turkmen gas imports, we have recently reduced our gas production outlook for Turkmenistan over our 10-year forecast period.

- Turkmenistan's level of gas consumption will take up an increasing proportion of produced gas as the country's exports stagnate on the back of falling exports to Russia and Iran. As production continues to ramp up, we believe that gas consumption will follow suit, although at a slower pace, to 41.44bcm in 2025 compared with an estimated 25.46bcm in 2015.