"In our view, demand for oil on the world market has stabilised and our tender will find participants," the official said. Details of the acreage to be offered and terms of the tenders were scarce, but Turkmenistan may offer foreign firms a range of options including joint ventures with Turkmen partners and production sharing agreements. The second tender would differ from the first in that disputed Caspian fields would not be included this time. Multinational oil and gas firms are wary of investing in acreage which could become the subject of territorial disputes between the Caspian's five littoral states. Kazakhstan and Russia have agreed on a formula to divide the northern section of the Caspian, but differences remain between them and Iran, Azerbaijan and Turkmenistan on broaderdemarcation issues.

Turkmenistan and Azerbaijan have argued bitterly over several fields, some of which are already being developed by the giant Azerbaijan International Operating Company. The Turkmen tender could indicate whether multinationals' appetite for the landlocked Caspian has been whetted by the sharp rise in oil prices this year.