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Cablegate: Tunisia Economic Highlights

VZCZCXRO0227
PP RUEHTRO
DE RUEHTU #0791 1710539
ZNR UUUUU ZZH
P 200539Z JUN 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 3371
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0897
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7488
RUEHDO/AMEMBASSY DOHA PRIORITY 0418
RUEHLO/AMEMBASSY LONDON PRIORITY 1306
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0885
RUEHFR/AMEMBASSY PARIS PRIORITY 1777
RUEHRB/AMEMBASSY RABAT PRIORITY 8399
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0103
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4107
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS TUNIS 000791

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/MAG (HARRIS)
STATE PASS USTR (BELL), USPTO (ADLIN AND ADAMS), USAID (MCCLOUD)
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (JAMES), AND CLDP
(TEJTEL)
CASABLANCA FOR FCS (ORTIZ)
LONDON AND PARIS FOR NEA WATCHER

E.O. 12958: N/A
TAGS: ECON ETRD EINV EFIN ECPS TS
SUBJECT: TUNISIA ECONOMIC HIGHLIGHTS

REF: A. TUNIS 516

B. 06 TUNIS 2753

1. (U) This cable contains highlights of recent economic
developments in Tunisia on the following topics:

A. IMF Concludes 2007 Article IV Mission
B. Qatar Petroleum Awarded Skhira Refinery Tender

--------------------------------
IMF Concludes Article IV Mission
--------------------------------

2. (U) Following the Article IV consultations in Tunisia, the IMF
released a statement praising the GOT's efficient management of the
economy, strong growth, and macroeconomic stability. The IMF noted
that the banking sector has improved noticeably in the past three
years with the ratio of nonperforming loans (NPLs) declining from 24
percent of total loans in 2003 to 19.2 percent in 2006. While
praising Tunisia's solid economic performance, the IMF emphasized
that unemployment remains relatively high (13.9 percent), especially
among university graduates. The IMF recommended strengthening
Tunisia's macroeconomic position, continuing liberalization,
stimulating private investment, and pursuing reform of the education
and training systems. The final report will be released in July.

3. (SBU) Comment: The IMF recommendations are unlikely to differ
from those issued by Deputy Managing Director Murilo Portugal at the
conclusion of his visit in April (Ref A). Many of the reforms urged
by the IMF, such as liberalization of the capital account and the
reduction of NPLs, are already on the GOT agenda; the
recommendations are unlikely to push the timeline for economic
reform ahead of the current GOT schedule. End Comment.

--------------------------------------------- -
Qatar Petroleum Awarded Skhira Refinery Tender
--------------------------------------------- -

4. (U) On May 26, Qatari Deputy Prime Minister and Minister for
Energy and Industry, and Chairman of Qatar Petroleum (QP), Abdullah
Bin Hamad Al-Attiya, and the Tunisian Minister for Industry, Energy,
and Small and Medium Enterprise, Afif Chelbi, signed a Memorandum of
Understanding awarding the Skhira refinery tender to state-owned
Qatar Petroleum. The tender, estimated to be US $2 billion
investment, is a 30-year build, own, and operate project. The
Skhira oil refinery will be located in the Gulf of Gabes on the
eastern coast of Tunisia. The refinery will have a capacity of
about 120,000 to 150,000 barrels per day and is expected to be
completed in 2011.

5. (SBU) COMMENT AND BACKGROUND: With the Skhira refinery, Tunisia
aims to boost Tunisia's refinery capacity to meet the growing demand
for oil products. Currently, Tunisia has only one refinery located
in Bizerte, with a daily capacity of 30,000 barrels. The new
refinery would give Tunisia the capacity to refine all domestic
crude oil production. According to ETAP, Tunisia's state-owned oil
company, Tunisia produces on average about 112,000 barrels of crude
oil per day. QP's investment follows Qatar Telecom's foray into the
Tunisian market (Ref A) and reflects the growth of Qatari and Gulf
(Ref B) investment in Tunisia. END COMMENT AND BACKGROUND.
GODEC

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