This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS ANKARA 006231 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD EPET PREL TU IZ
SUBJECT: SOMO ARREARS TO TURKEY AND FUEL SHORTFALL TO IRAQ 
 
REF: A. ANKARA 6095 
     ¶B. ANKARA 3842 
     ¶C. BAGHDAD 2845 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1.  (SBU) MFA informed EconOff on October 13 that SOMO 
arrears (45 days past product delivery) to Turkish fuel 
suppliers had grown to $750 million and urged the USG to make 
demarches in Iraq to alleviate this growing problem (Ref A). 
According to the MFA, SOMO recently annulled 22 of 36 
contracts with Turkish suppliers (for insufficient or late 
delivery of product), thus explaining the current shortfall 
in SOMO trucks.  (SOMO truck shipments are very volatile, 
depending on conditions, but in normal times average 600-800 
trucks moving south per day.  Over the last week, since a one 
day closure for construction, trucks have totalled 200-300, 
with a particularly dramatic fall-off in "benzene"- 
gasoline.)  MFA emphasized that the Foreign Economic 
Relations Board (DEIK in Turkish), representing the bulk of 
Turkish suppliers, was getting increasingly restive about the 
(repeated) arrears problem.  She promised to forward a list 
of the cancelled contracts when available. 
 
¶2.  (SBU) MFA noted that the GOT Foreign Trade 
UnderSecretariat had met with SOMO in late August to resolve 
problems and SOMO had made a significant payment at that 
time.  On September 22 Foreign Trade sent a letter to SOMO 
explaining why there had been delays in shipments over the 
preceding month, primarily due to new export license 
procedures to attempt to control fuel trade.  Despite this, 
MFA stated that SOMO had cancelled a large number of 
contracts, many of which were providers of benzene.  This 
further exacerbated the problem and put many of these 
companies in greater difficulty (having acquired fuel and now 
finding their contracts annulled.)  MFA asserted that Foreign 
Trade was not currently holding up authorization of fuel 
export. 
 
¶3.  (SBU) Post has long noted that fuel exports will remain 
challenged as long as there is just the single Habur Gate, 
but the border gate does not appear to be the source of the 
current problem.  Customs officials have implemented 
reasonable measures to facilitate passage of fuel, but not 
enough fuel is now arriving at the gate.  Current 
construction to renovate and expand the gate explains some 
portion of the delay, but delays and/or shortfalls will 
likely be exacerbated unless and until SOMO makes significant 
payments to reduce arrears. 
MCELDOWNEY