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Cablegate: Extrancheck: Post Shipment Verification: Seismic Cable

VZCZCXYZ0003
RR RUEHWEB

DE RUEHHK #0824/01 1270211
ZNR UUUUU ZZH
R 060211Z MAY 08
FM AMCONSUL HONG KONG
TO RUCPDOC/USDOC WASHDC
INFO RUEHC/SECSTATE WASHDC 4802
RHMFIUU/HQ BICE WASHINGTON DC
RUEHGP/AMEMBASSY SINGAPORE 3846

UNCLAS HONG KONG 000824

USDOC FOR 532/OEA/MNICKSON-DORSEY /DMUSLU
USDOC FOR 3132 FOR FCS/OIO REGIONAL DIRECTOR WILLIAM ZARIT
BICE FOR OFFICE OF STRATEGIC INVESTIGATIONS
SINGAPORE FOR FCS

SIPDIS

E.O. 12958: N/A
TAGS: BMGT BEXP ETRD ETTC HK
SUBJECT: EXTRANCHECK: POST SHIPMENT VERIFICATION: SEISMIC CABLE
REPAIRS PTE LTD

REF: A) USDOC 01395 B) USDOC 01396

1.Unauthorized disclosure of the information provided below is
prohibited by Section 12C of the Export Administration Act.

2. As per Reftel A request and at the direction of the Office of
Enforcement Analysis (OEA) of the USDOC Bureau of Industry and
Security (BIS), Regional Export Control Officer Philip Ankel (ECO)
conducted a post shipment-verification (PSV) at Seismic Cable
Repairs Pte. Ltd., Loyang Offshore Supply Base, Loyang Crescent Unit
B19, Singapore (SCB). The items in question are depth limited
hydrophones. The items referenced in Reftel A are valued at USD
27,000 and the items referenced in Reftel B are valued at
approximately USD 103,000. The items are classified under Export
Control Classification Number (ECCN) 6A991 and are controlled for
anti-terrorism (AT) reasons. The exporter for the items in Reftel A
was Hydroscience Technologies of Mineral Wells, Texas while the
exporter for the items referenced in Reftel B was Teledyne
Instruments of Houston, Texas.

3. According to the Singapore companies registry, SCB was
registered in 1989 and its registered share capital is the Singapore
dollar equivalent of approximately USD 100,000. Its directors are
Singapore citizens Vincent De Silva, Leon Vashon De Silva, Shirlyn
De Silva and Mrs. Vincent De Silva, Nee Doreen Tan Siam Choon.
Shareholders are Mr. And Mrs. Vincent De Silva. The company does
not have a web site.

4. On April 21, 2008, the ECO, accompanied by a representative of
Singapore Customs visited the company and met with Mr. Leon Vashon
de Silva, General Manager, Mr. Vincent De Silva, Managing Director
and Mrs. De Silva. According to Vincent De Silva, the company was
founded as a partnership between he and his wife in 1978. In 1991,
the company was registered as a limited company in Singapore. It is
a family business engaged in the repair of oil and gas exploration
cables. Its clients are multinational seismic companies engaged in
oil and gas exploration. Those customers include PGS Exploration,
Scan Geophysical, CGG Veritas. In turn, those customers are engaged
by the world's major oil companies for exploration activities
worldwide.

5. The hydrophones that are the subject of the PSV are used on
cables that are themselves used to obtain seismic data from the sea
bottom. The new hydrophones are used to replace damaged hydrophones
in cables brought to SCB for repair. Old hydrophones are destroyed
and sold for scrap. SCB's customers do not tell SCB the location
where the cables are being used, primarily for commercial
competitive reasons. That is because those customers do not want
competitors to know that one or more of their exploration boats is
unable to work because of technical difficulties. However, Mr.
Vincent De Silva stated that he is typically able to ascertain where
the cables are being used because of some of the physical
characteristics of the cables. SCB's customers use various
logistics companies to deliver and pick up the cable that is being
repaired (typically in Singapore). Mr. Leon Vashon De Silva
stressed that SCB does not resell any hydrophones as such but only
purchases those items for use in cables that it repairs.

6. As to the particular items in question, Mr. Leon Vashon De Silva
provided documentation reflecting that SCB had received the items
referenced in Reftel B. These items had, in turn, been turned over
to Scan Geophysical as part of repaired cable. Mr. Leon Vashon De
Silva provided documentation reflecting receipt of the items in
Reftel A and subsequent delivery to Dalmorneftegeophysica
(www.dmng.ru) as part of repaired cable. According to Mr. Leon
Vashon De Silva, this company has two boats in the region conducting
various oil and gas exploration projects. He noted that this
company has switched to a French system and will likely no longer
need replacement hydrophones from the United States.

7. Mr. Leon Vashon De Silva was very well versed in U.S. export
controls on the applicable items. He as quite pleased to meet the
ECO and discussed at length the company's troubles associated with a
prior attempt to obtain more controlled (but apparently cheaper)
hydrophones. That attempt was not successful as a result of a BIS
license denial referenced in Reftels A and B. Mr. Leon Vashon De
Silva attended a BIS seminar held in Singapore in 2005 and relayed
the company's attempt to legally acquire other hydrophones. He
stressed that the company does not sell the hydrophones except as a
part of works contracts for seismic exploration services providers.
He also stressed that his company does not do business with any of
the sanctioned countries. He also stated that his company is not
related to Seismic Singapore and that this company had gone out of
business some time ago.

8. In addition, Mr. De Silva also pointed out to the ECO (during a


tour of the facility) that Teledyne Instruments (the supplier in
Reftel B) had itself opened a cable repair facility immediately
adjacent to the SCB facility. He further stated that Teledyne had
offered to acquire SCB but had been rebuffed (apparently on account
of price). In effect, Teledyne is now both a supplier of
hydrophones but also a direct competitor in the cable repair
business.

9. At the time visited, SCB appeared to be a suitable recipient of
the commodities shipped since SCB cooperated with the PSV, provided
ECO with access to all appropriate documents and operates a line of
business consistent with the use of the items. Also, SCB was
informed of applicable export control rules (especially those
relating to reexports to sanctioned countries) and indicated its
intent to comply with them.

© Scoop Media

 
 
 
 
 
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