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Cablegate: Chevron Signs Petrocaribe Agreement with Goh

VZCZCXRO1988
PP RUEHQU
DE RUEHPU #0234 0461834
ZNY CCCCC ZZH
P 151834Z FEB 08 ZDK
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 7687
INFO RUEHZH/HAITI COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 1800
RUEHCV/AMEMBASSY CARACAS PRIORITY 3222
RUEHSA/AMEMBASSY PRETORIA PRIORITY 1605
RUEHQU/AMCONSUL QUEBEC PRIORITY 1028
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L PORT AU PRINCE 000234

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/CAR
WHA/EPSC FOR FAITH CORNEILLE, ED MARTINEZ
EB/IFD
STATE PASS TO USAID FOR LAC/CAR
TREASURY FOR JEFFEREY LEVINE
COMMERCE FOR SCOTT SMITH

E.O. 12958: DECL: 02/13/2018
TAGS: ENRG EPET ECON POL EAID HA
SUBJECT: CHEVRON SIGNS PETROCARIBE AGREEMENT WITH GOH

REF: A. 07 PORT AU PRINCE 1416

B. 07 PORT AU PRINCE 1679

Classified By: Ambassador Janet A. Sanderson for reasons 1.4 (b) and (d
).

1. (C) Michael Lecorps, Director General for the Government
of Haiti's (GoH) Office of Monetization within the Ministry
of Finance, told Econoff on January 25 that Chevron signed a
three-year contract the week of January 21 with the GoH under
the PetroCaribe arrangement to purchase refined oil products
produced by the Venezuelan state-owned oil company PDVSA from
the GoH through private sector oil traders. (Note: The
Office of Monetization, responsible for managing PetroCaribe
in Haiti, was previously in the Ministry of Planning. End
note.) Chevron also agreed to ship the refined petrol on one
of its tankers. The GoH expects to receive a PetroCaribe
shipment in late February or early March. The two other oil
companies operating in Haiti, Total (French-owned) and Dynasa
(a Haitian company) are still negotiating with the GoH.
Patryck Peru-Dumesnil (protect), Chevron's Haiti Retail
Manager, told Econoff on January 30 that he suspects Total
will sign an agreement with the GoH soon, but finds it
"strange" that Dynasa, a Haitian company, has not. (Note: As
of March 1, ExxonMobil (Esso) will no longer operate in Haiti
(Ref B). End note.)

2. (C) Peru-Dumesnil told Econoff that Chevron management in
the U.S. does not want to make a lot of "noise" about the
agreement because they do not want to appear to support
PetroCaribe. Peru-Dumesnil noted that Chevron has been
experiencing some trouble with product delivery from PDVSA in
and outside of Haiti. Most recently, PDVSA suspended
shipment of 'Premium' 95 oil because of problems at a
refinery in Venezuela. Peru-Dumesnil is not certain when
PDVSA will resume shipment of the 'Premium' oil. He also
said that Venezuelan President Chavez has invested very
little in the maintenance and improvement of PDVSA facilities
while noting that PDVSA has decreased production by 28
percent. Peru-Dumesnil added that PDVSA's inefficiency is
attributed to Chavez's dismissal of approximately 15,000
PDVSA employees after the attempted coup in 2003. He
subsequently filled the vacancies with military and close
friends with little or no competency in the oil industry. He
noted that the next three months would be "unpredictable".

3. (C) Partially addressing Peru-Dumesnil's concern over
PDVSA's ability to supply refined products under PetroCaribe,
the GoH agreement allows Chevron and the other companies to
purchase oil from another source in the event that PDVSA
cannot supply the oil. However, Peru-Dumesnil stressed that
finding another source is difficult, requires considerable
lead-time and would inevitably affect the cost of oil for the
companies. He explained that after almost two years of
negotiating and educating the GoH on oil industry operations,
Chevron finally obtained its desired terms from the GOH.
However, the feasibility of the PetroCaribe scheme that
inserts the GOH into the purchase and sales chain remains
unproven. PDVSA will sell to the GoH, which will then sell
to private oil traders, who finally will sell to the oil
companies in Haiti for distribution.
SANDERSON

=======================CABLE ENDS============================

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