Russia defends MTS investor warning on Turkmenistan

> * Turkmenistan complained it had no fare share of MTS profit * MTS warned energy firms business in Turkmenistan is risky * Russian diplomacy breaks silence, backs MTS in Turkmen row By Vladimir Soldatkin MOSCOW, March 7 (Reuters) - Russia's Foreign Ministry on Monday threw its weight behind the country's top mobile telecoms firm, MTS (MBT.N), pledging to defend its interests in a row with gas-rich Turkmenistan which suspended its licence. The dispute is aggravated by Moscow's hunt for Ashgabat's huge gas reserves -- also an attraction for the European Union trying to secure access to Turkmen gas for its Nabucco pipeline project, a rival to the Russia-sponsored South Stream link. Apart from exports to Russia, Turkmenistan, with the world's fourth-largest reserves of the fuel, also supplies its gas to China and Iran and eyes a route to India and Pakistan via Afghanistan to cut dependence on former imperial master Moscow. MTS, part of oil-to-telecoms conglomerate Sistema (SSAq.L), had an 85 percent share of Turkmenistan's mobile market until its licence was suddenly suspended last year for reasons that the company said "were never fully justified". [ID:nLDE6BL1FK] "We believe it is a matter of principle that the conscientious Russian investor's interests are upheld.

"The dispute is aggravated by Moscow's hunt for Ashgabat's huge gas reserves -- also an attraction for the European Union trying to secure access to Turkmen gas for its Nabucco pipeline project, a rival to the Russia-sponsored South Stream link"We will provide necessary help to MTS in the future," the Russian Foreign Ministry said in a statement. The rebuke was issued as a response to the Turkmen Foreign Ministry's riposte to MTS last week, when Ashgabat said it had not received its fair share of the "enormous profits" generated by the operator in the country. Last week MTS sent a letter to participants of Turkmenistan's oil and gas roadshow in Singapore, warning energy majors of the "perils" of investing in the Central Asian nation. It said its sad experience in the country should serve as a "cautionary tale" for all those doing business in Turkmenistan. MTS said it had invested over $188 million in Turkmenistan since 2005 and serviced more than 2.4 million customers.

It had previously said that it could incur total losses of about $600 million following the licence suspension. [ID:nLDE72208F] Relations between Moscow and Ashgabat soured after a dispute over a pipeline rupture in 2009, which ultimately led to a sharp reduction in Turkmen gas exports to Russia on the back of declining demand for energy as the economic downturn bit. (Reporting by Vladimir Soldatkin; Editing by Jon Loades-Carter) Telecommuncations Services Tweet this Share this Link this Digg this Email Reprints