Cablegate: Niger: Chinese Gov't Brings Dream to Build an Oil Refinery

VZCZCXRO1693
RR RUEHMA RUEHPA
DE RUEHNM #1066/01 3081059
ZNR UUUUU ZZH
R 031059Z NOV 08
FM AMEMBASSY NIAMEY
TO RUEHC/SECSTATE WASHDC 4655
INFO RUEHFR/AMEMBASSY PARIS 0731
RUEHZK/ECOWAS COLLECTIVE
RUEHNJ/AMEMBASSY NDJAMENA 1551
RUEHYD/AMEMBASSY YAOUNDE 0041
RUEHBJ/AMEMBASSY BEIJING 0193

UNCLAS SECTION 01 OF 02 NIAMEY 001066

SIPDIS

DEPT FOR AF/W Jane Dennison

PARIS FOR AF WATCHER

E.O. 12958: N/A
TAGS: EPET EINV ECON SOCI PGOV SENV NG

SUBJECT: NIGER: CHINESE GOV'T BRINGS DREAM TO BUILD AN OIL REFINERY
CLOSER TO REALITY AMID LOCAL CALLS FOR A THIRD TERM FOR PRESIDENT
TANDJA

REF: A) NIAMEY 772 B) NIAMEY 452 C) NIAMEY 278

1. Summary. The Government of Niger's (GON) dream to build an oil
refinery moved a step closer to becoming reality at an elaborate
first-stone laying ceremony on October 27, 2008. The GON (all
Cabinet Ministers, many National Assembly Members), traditional
chiefs, political party heads, diplomatic corps dean (Chadian
Ambassador) and Chinese Ambassador, business leaders and civil
society leaders mobilized to Zinder (located approximately 900
kilometers east of Niamey and future site of the refinery) to attend
the ceremony. Lauding President Tandja's vision and accomplishments
such as the launches of the Kandaji Dam project and second Niamey
bridge (to be built by the Chinese) to cross the Niger River, local
chants filled the air calling for Tandja's third term. The refinery
has long been touted as the answer to Niger's energy needs and
economic development. The refinery's target completion year is 2011
and is expected to produce 20,000 barrels per day. End summary.

2. Fanfare and Expectations. For several days after the laying of
the first stone for the refinery, the media (print, radio,
television) was saturated with reporting on the Chinese refinery
project. State television (Tele-Sahel) has had as its backdrop for
the evening news a photo of the refinery draft. Prime Minister
Seini Oumarou's official remarks emphasized that the GON's "first
refinery" will usher in a new era of industrialization, economic
development and prosperity for Niger. He noted the names of all 20
Ministers of Mines and Energy who over the decades had worked on the
portfolio and contributed in their own way to the realization of the
nation's dream. He spoke of the day when Niger would become a
member of the Organization of the Petroleum Exporting Countries
(OPEC). (Note: the GON Council of Minister's voted on June 2, 2008,
to award to the state-owned Chinese national petroleum corporation
in a US$5 billion dollar deal the Agadem block in N'Guigmi (located
about 1500 kilometers northeast of Niamey) in the region of Diffa.
End note.)

3. The Minister of Mines and Energy Mohamed Abdoulahi helped broker
the deal with the Chinese that the GON anticipates will facilitate
Niger's entry into OPEC. The refinery is expected to produce 20,000
barrels a day, while Niger's internal oil consumption has been
estimated at about 7,000 barrels a day. The $US 1 billion
investment to build the refinery is expected to cover construction
costs, estimated at US$600 million, and the remaining US$400 million
needed to build a pipeline connection to Chad. It was reported that
about 1500 jobs will be created during the construction phase of the
project and that 500 jobs will be created at the oil exploitation
phase. The Council of Ministers in the project award phase required
that the project be completed in three years or the Chinese face a
financial penalty or possible or a retraction of the exclusive
rights to explore in the Agadem block. (Note:The newspaper
"L'Enqueteur" reported the GON is preparing for the arrival of
Chinese President Hu Juntao, but the GON has not made any statement
on the matter. End note.)

4. Nigerien Constitution is not the Coran. Amid the droves of
people who attended the Oct. 27 ceremony to lay the refinery's first
stone, there were chants for GON President Tandja to "stay the
course" and run for a third term of office. On Oct. 31 in Zinder,
there also was a call and a march by a "committee to support Tandja"
inviting the President to seek a third term and urging the National
Assembly to think about a mechanism to permit the President to do
so.

5. In "As-Salam", the weekly Islamic newspaper, President of the
Nigerien Islamic Association Collective Cheikh Salifou Oumarou
affirmed his support for a third mandate for Tandja. In response to
a question about the Nigerien Constitution limiting presidential
mandates to two five-year terms, the cheikh responded that "in Islam
there are no term limits for a leader." When the interviewer stated
that many in the general public did not find it appropriate for the
cheikh, as a religious leader, to make such a public statement of
support for Tandja, the cheikh expressed surprise that "certain
politicians believe Muslims shouldn't have any opinion about the
nation's political life because Muslim leaders are also part of
civil society." He added, "we are not the United States of America,
but one saw over there how religious leaders publicly supported
President Bush when he ran for office. Muslims have the right to
state which candidate they support." He concluded, "If a person in
power has made the nation more prosperous, then there is no reason
to block his momentum. Speaking my personal opinion and in my role
as the leader of the Muslim Association, it's a good thing to modify
the constitution to enable Tandja to lead the country because he has

NIAMEY 00001066 002 OF 002

proven himself. The constitution is not the Coran, one can change
it when necessary."

6. Moving Forward in the Dark. The Network of Organizations on
Transparency and Budget Analysis (ROTAB) issued a statement noting
the laying of the first stone for the refinery as an historic event
for Niger, but criticized the opacity in the contract award process,
including certain financial clauses and actions taken. It
highlighted the GON failure to complete a study on the social and
environmental impacts in the regions of the project exploitation.
ROTAB called for more information on the additional revenue to
become available for the national budget, as well as information on
future investments necessary for Niger's development.

ALLEN

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