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Cablegate: Next Moves in Brazilian Energy Engagement

VZCZCXRO1518
RR RUEHRG
DE RUEHBR #1335/01 2821755
ZNR UUUUU ZZH
R 081755Z OCT 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 2617
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUEHSO/AMCONSUL SAO PAULO 2883
RUEHRI/AMCONSUL RIO DE JANEIRO 6728
RUEHRG/AMCONSUL RECIFE 8564
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 001335

SENSITIVE

SIPDIS

ENERGY DEPARTMENT FOR ACTING DEPUTY SECRETARY KUPFER,
ENERGY DEPARTMENT FOR A.BECK,G.WARD,C.GAY, R.DAVIS,A,CHIANG
DEPT FOR M.ROONEY, F.CORNEILLE, R.SCHWARTZ, AMB. MORALES
DEPT ALSO FOR M.MCMANUS, G.MANUAL, D.SCHNIER
DOC FOR SECRETARY GUTIERREZ
DOC ALSO FOR A.DRISCOLL, L.FUSSEL, W. BASTIAN

E.O. 12958: N/A
TAGS: PREL ENRG EINVKSCA BR IN
SUBJECT: NEXT MOVES IN BRAZILIAN ENERGY ENGAGEMENT

REF: A) Brasilia 910, B) Rio 138, C) Rio 135, D) Brasilia 1122

1. (SBU) Based on a conversation between Brazilian Ministry of Mines
and Energy (MME) Minister Lobao and Ambassador Sobel on October 6,
Deputy MME Minister Zimmermann is expected to come to the United
State in late October, to be followed by a visit at a later date by
Minister Lobao. The trip is envisioned to have elements of
commercial engagement, energy cooperation, legislative
consultations, and exploration of financing opportunities, as well
as working towards the Summit of the Americas energy agenda, all
designed to maximize our energy relations with Brazil which is
poised to become a global energy leader. Department of Energy (DOE)
and MME have already been discussing ways to reinvigorate the energy
working group established under the 2003 MOU signed by DOE and MME
on broad energy cooperation, building on areas of cooperation
previously identified during the August visit to Brazil of Acting
Deputy Secretary of Energy Kupfer. Post requests Washington
assistance to ensure that we take advantage of the strategic
opportunity the Zimmermann and Lobao visits present. (see REFTEL D)
END SUMMARY.

2. (SBU) Ambassador Sobel met with Minister of Mines and Energy
(MME), Edison Lobao, October 6 to discuss future plans for further
deepening the bilateral energy relationship. After visits by
Department of Energy Acting Deputy Secretary Kupfer and Department
of State Undersecretary for Economic, Energy, and Agricultural
Affairs Reuben Jeffery during August and October respectively, and
with the upcoming visit by Secretary of Commerce Gutierrez (October
9 and 10), the Minister and his staff have had multiple
opportunities to engage with high level U.S. officials to discuss
energy issues between our two countries. During Acting Deputy
Secretary Kupfer's trip in August, the Minister and his staff
engaged in an exchange with Kupfer and his delegation regarding
potential future areas of coordination and developed a long list of
attractive options for collaboration (ref D). Both DOE DepSec and
DOS U/S Jeffery also heard a great deal about energy-related
commercial opportunities for U.S. firms in Brazil. As the
Ambassador and Lobao met to follow up on these visits and prepare
for the Gutierrez visit, they discussed possible options for travel
by Lobao to the U.S. to further engage on these areas of interest.

2. (SBU) Given all the possibilities for ways to advance the energy
relationship with a trip to the United States, the Ambassador
suggested that Lobao send his deputy and well-regarded energy
expert, Marcio Zimmermann, to the United States first. A Zimmermann
visit could help reinvigorate and if necessary establish cooperation
mechanisms so as to concretely determine what can be undertaken in
the areas of interest identified during the Kupfer visit, given the
funding situation in both nations, as well as make some industry and
legislative contacts. Lobao himself could then travel to the United
States post-election to help solidify energy relations with the new
administration and ensure that energy efforts remain a priority into
2009 and beyond. The Ambassador suggested that Zimmerman's visit to
the U.S. might include: a meeting at DOE; a meeting with the U.S.
Chamber of Commerce to include energy companies not currently active
in Brazil; meetings with OPIC and EXIM to discuss opportunities for
U.S. companies in Brazil to permit them to access funding sources;
Department of Commerce meetings including meeting with mid-sized oil
companies and meeting with the U.S. nuclear industry; a meeting with
Congressional leaders, and meetings at State Department to include
consultation on Summit of the Americas. Lobao agreed with the
proposal, suggested he might then travel in the spring once the new
Administration was in place, or perhaps, at the Ambassador's
suggestion, take advantage of the transition time in December to
make initial contacts and incorporate participation in the Wilson
Center's planned Brazil event on December 5. Lobao indicated that
he would be open to either option and preferred to determine the
timing of his trip based on the outcome of Zimmermann's Washington
visit.

3. (SBU) The Ambassador agreed and emphasized that it was
particularly important that Zimmermann travel to the U.S. by the end
of October to build on all the work done so far and allow for the
establishment of a working group for the future. He said also
wanted to be sure that the visit included commercial discussions,
particularly opportunities for small-to-medium sized U.S. oil
companies. Lobao will consider the timing of his trip after the
return of his Deputy from Washington.

BRASILIA 00001335 002 OF 002

4. (SBU) Separately, DOE International Office representative Rhia
Davis, EST Counselor, and Econ Deputy, met with MME's International
Affairs Advisor Rubem Barbosa to plan for a preliminary subject
matter experts' discussion in advance of Lobao's and Zimmermann's
trips. As a result of the discussion, DOE and MME will work to
explore implementation strategies for areas of energy cooperation
identified during Kupfer's trip and of corresponding experts for a
DVC discussion to be scheduled in the coming weeks. The goal will
be to identify the best items for fruitful cooperation and decide
how to best address them. An October Zimmermann visit should
provide impetus to the effort and empower the working group to
advance.

5. (SBU) COMMENT: Brazil is poised to become a global energy
leader. The country is already the leading exporter of biofuels
and, with the recent offshore discoveries, stands to become a
country with one of the largest reserves of oil and gas in the
world. Post is eager to ensure that we lay the foundations to build
as strong a bilateral energy relationship as possible through the
transition and beyond. Given concerns regionally and globally with
U.S. dependence on energy suppliers that are less than friendly,
unstable, or in some cases hostile, fully engaging bilaterally with
Brazil as a friendly, democratic, increasingly engaged regional
leader provides an attractive partner in addressing our energy
security needs. The relationship also offers options for energy
cooperation in the region. Much as our partnership in biofuels has
served both countries' interests well, we believe broader and deeper
energy engagement will be similarly productive. Also, as a
not-so-coincidental byproduct of our biofuels collaboration, we have
seen an increase in Brazilian receptivity to working together in
other areas as well. Concretely expanding this energy partnership
has the potential to deepen the overall bilateral relationship.
Post requests the assistance of State, DOE, and DOC in ensuring that
the visits by Deputy Secretary Zimmermann, and later Minister Lobao,
take full advantage of this strategic opportunity.

SOBEL

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