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Cablegate: Brazilian Foreign Ministry Cautious On Iran, But

VZCZCXRO4075
RR RUEHRG
DE RUEHBR #1543/01 3371538
ZNY CCCCC ZZH
R 021538Z DEC 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 3005
INFO RUEHRG/AMCONSUL RECIFE 8763
RUEHRI/AMCONSUL RIO DE JANEIRO 6940
RUEHSO/AMCONSUL SAO PAULO 3137
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 001543

SIPDIS

DEPARTMENT FOR WHA AND NEA

E.O. 12958: DECL: 11/26/2018
TAGS: PREL BR IR
SUBJECT: BRAZILIAN FOREIGN MINISTRY CAUTIOUS ON IRAN, BUT
STILL BUILDING TIES

REF: A. STATE 119167
B. BRASILIA 752

Classified By: Ambassador Clifford M. Sobel, Reason 1.4 (b) and (d)

1. (C) Summary: During separate meetings, both Ambassador
Everton Vargas, Under Secretary for Political Affairs at the
Brazilian Ministry of External Relations, and Mines and
Energy Minister Edison Lobao, confirmed to Ambassador Sobel
that Petrobras is not planning any further investments in
Iran, to include the Caspian deal indicated in recent
industry press reports (ref a). Furthermore, Ambassador
Vargas stated that separate news reports suggesting that
Foreign Minister Amorim had extended an invitation to Iranian
President Ahmadinejad to meet with President Lula were not
accurate. Both Vargas and Lobao noted that Brazil is under
tremendous pressure from Iran, both to set up such a meeting
and to increase Petrobras investment in Iran, but they said
Brazil currently has no plans to expand the scope of the
relationship outside of the trade area. End Summary.

- - - Petrobras Truly Out of Iran - - -

2. (C) In a November 10 meeting with Minister of Mines and
Energy Lobao, Ambassador Sobel inquired about industry news
reports which suggested that Petrobras was working on a
Caspian Sea exploration deal with Iran. Ambassador Sobel
noted that the head of Petrobras, Jose Sergio Gabrielli, had
previously told him that Petrobras wells in Iran had been
capped and there were no new Petrobras plans to engage with
Iran. Lobao responded that, "Gabrielli is right." The
Minister also noted that Iran has told the GOB they are very
unhappy with US efforts to discourage investment and have
asked the GOB to reconsider, but that there are no Brazilian
plans to do so at this time.

3. (C) In a separate meeting with Ambassador Vargas on
November 18, Ambassador Sobel also raised the news reports of
the Caspian deal, to which Vargas responded that they were
absolutely not true. He further noted that Petrobras had
just given a presentation at Itamaraty in which Petrobras
officials stressed that the company's number one priority was
the pre-salt reserves off the Brazilian coast, followed by
exploration in U.S. waters in the Gulf of Mexico. There are
many things that Petrobras can be accused of, Vargas said,
"but they are not stupid." Vargas said that the GOB is fully
aware of Iran's status with the international community and
the restrictions imposed by UN Security Council resolution
and sees the dangers and risks associated with investment in
Iran. Even so, Vargas said, there is trade to be done
between the two countries and Brazil is interested in
increasing it within the bounds of UNSC sanctions. President
Lula in particular is very interested in the trade aspect of
the relationship, Vargas noted, as he knows that the Iranians
"have money to spend." (Note: Exports to Iran account for
about 30% of total Brazilian exports to the Middle East, or
about US$1.8 billion, which accounts for more than 95% of
trade volume between the two countries. End note.)

- - - Amorim in Tehran; No Presidential Meeting in the
Works--Yet - - -

4. (C) During the meeting with Vargas, Ambassador Sobel also
raised news reports of Amorim's recent trip to Tehran, the
first such visit for a Brazilian foreign minister in 17
years. According to news reports, Amorim -- accompanied by a
delegation of Brazilian business leaders in the areas of oil,
agriculture, and automobiles -- visited Tehran for several
days starting on November 1, during which he met with
President Ahmadinejad and discussed Iran's "peaceful" nuclear
energy program, the global financial crisis, trade, and other
bilateral issues. Asked if news reports that Amorim
presented Ahmadinejad with an invitation for a
presidential-level meeting between the Iranian president and
Lula, Vargas responded that no formal invitation was made.

5. (C) Asking not to be quoted, Vargas stressed that the
Iranians have put great pressure on Brazil to issue an
invitation to Ahmadinejad, but Itamaraty has continually come
up with excuses to avoid it. Amorim had postponed his trip
to Tehran three times, he added. Finally, Vargas said that
Brazil had insisted that any invitation for an Ahmadinejad
visit must be preceded by a visit from Iran's foreign
minister "exclusively" to Brazil, as Amorim had done in going
to Iran.


BRASILIA 00001543 002 OF 002


6. (C) Vargas ended by asserting that Brazil is clear about
its obligations under UNSC resolutions, and that Brazil will
strictly adhere to whatever boundaries are imposed by the
UNSC resolutions. He recalled that Brazil had forced the
Defense Ministry to shut down the Iran booth at the Latin
America Air and Defense Show in Rio in 2007 (ref b), and said
that they had already made clear to the MOD that they could
not issue an invitation to Iran for the upcoming show.

- - - Comment - - -

7. (C) These recent discussions suggest a greater sense of
caution on the part of Brazilian officials regarding Brazil's
dealings with Iran than in the past. This comes in the wake
of increased dialogue with the GOB during the past year by
Emboffs and senior USG officials-- Secretary Rice, U/S Burns,
A/S Shannon and A/S Welch, S/P Dr. Gordon, among
others--concerning Iran. However, reporting in other
channels suggests that Amorim was more forward-leaning
regarding a visit by Ahmadinejad than Vargas indicated. The
GOB has made clear that it intends to cultivate commercial
and other ties to the extent that UNSC sanctions allow, and
we believe a presidential-level meeting between Ahmadinejad
and Lula remains likely. At present, the GOB is trying to
assuage our concerns as it proceeds cautiously to strengthen
its ties with Iran. We will need to intensify our dialogue
on Iran if we hope to sway the GOB that this is not the
moment for increased engagement with Tehran. End comment.
SOBEL

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