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Cablegate: Chevron and Bp Re-Think Their Zimbabwe Operations

VZCZCXRO6913
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0365 1151226
ZNR UUUUU ZZH
R 241226Z APR 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 2828
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHUJA/AMEMBASSY ABUJA 1944
RUEHAR/AMEMBASSY ACCRA 1949
RUEHDS/AMEMBASSY ADDIS ABABA 2071
RUEHBY/AMEMBASSY CANBERRA 1348
RUEHDK/AMEMBASSY DAKAR 1705
RUEHKM/AMEMBASSY KAMPALA 2127
RUEHNR/AMEMBASSY NAIROBI 4558
RUEAIIA/CIA WASHDC
RUEHGV/USMISSION GENEVA 1206
RHEHAAA/NSC WASHDC
RHMFISS/JOINT STAFF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC//DHO-7//
RUCPDOC/DEPT OF COMMERCE WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK//DOOC/ECMO/CC/DAO/DOB/DOI//
RUZEHAA/CDR USEUCOM INTEL VAIHINGEN GE//ECJ23-CH/ECJ5M//

UNCLAS HARARE 000365

SIPDIS

SENSITIVE
SIPDIS

AF/S FOR S. HILL
NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
TREASURY FOR J. RALYEA AND T.RAND
COMMERCE FOR BECKY ERKUL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS

E.O. 12958: N/A
TAGS: EPET EINV PGOV ASEC ZI
SUBJECT: CHEVRON AND BP RE-THINK THEIR ZIMBABWE OPERATIONS

REF: KAMPALA 0514

---------------------------------------------
Chevron Sees Dark Sky Over Zimbabwe Operation
---------------------------------------------

1. (SBU) Chevron had no plans to divest its downstream
interests in Southern Africa, Chevron's Country
Representative Masimba Kambarami told econoff on April 16,
when asked about the company's divestment plans elsewhere in
Africa (reftel). Southern Africa was a key market for the
company and the company intended to continue to invest in the
southern SADC region, with the exception of Zimbabwe, for
now. Although Chevron had "an appetite to stay" in Zimbabwe,
operating conditions were difficult and the company had been
studying whether to expand aggressively or downsize here
under a "blue-sky, grey-sky" project since September 2007.

2. (SBU) Kambarami admitted that since the harmonized
elections on March 29, the sky had turned "pretty grey" for
Chevron in Zimbabwe. Fuel sales were down both at the retail
and industrial level and Chevron was considering winding down
service to cover only Harare and Bulawayo; selling or
mothballing many of its fuel depots across the country; and
laying off half of its directly employed staff of 150. Under
blue sky or grey, however, Kambarami assured econoff that
Chevron would be able to continue to supply Embassy Harare
with fuel in the capital.

-------------------------------
BP Puts Expansion Plans on Hold
-------------------------------

3. (SBU) BP Zimbabwe has put on hold plans to expand the sale
of fuel by coupon to 16 more service stations around the
country, BP Zimbabwe CEO Engelhardt Kongoro told econoff on
April 17. The uncertain political and economic climate plus
a downturn in sales and sharp competition from new &cowboy8
entrants to the market had forced the company to re-think its
network expansion plans. Kongoro said sales had fallen to
only 20 percent of the volume in 1999, and the company had
not issued a dividend since 1995.

DHANANI

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