VZCZCXRO7392
OO RUEHBC RUEHDE RUEHKUK RUEHMOS
DE RUEHKU #1002/01 0810413
ZNY CCCCC ZZH
O 220413Z MAR 06
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3612
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY
RUEKJCS/OSD WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 04 KUWAIT 001002 
 
SIPDIS 
 
SIPDIS 
 
LONDON FOR TSOU 
PARIS FOR ZEYA 
DEPARTMENT OF ENERGY FOR IE 
NSC FOR RAMCHAND 
STATE FOR NEA/ARP AND NEA/IR 
EB/ESC/IEC FOR GALLOGLY, DOWDY 
 
E.O. 12958: DECL: 03/25/2016 
TAGS: ENRG PREL IR KU IZ KUWAIT IRAN RELATIONS
KUWAIT-IRAQ RELATIONS 
SUBJECT: ENERGY MINISTER AND COUNSELOR ZELIKOW DISCUSS 
IRAN, IRAQ, ENERGY SUPPLY SECURITY AND DEMOCRATIZATION 
 
Classified By: Ambassador Richard LeBaron for reason 1.4 (b) and (d) 
 
¶1.  (C) Summary:  In a March 19 meeting with DoS Counselor 
Zelikow, Kuwaiti Energy Minister Shaykh Ahmed Al-Fahd 
Al-Ahmed Al-Sabah said that Iran's strategies may have 
changed over the years but that the underlying agenda remain 
the same, to exert its influence throughout the region.  He 
alleged Iranian interference in Kuwait's internal politics, 
and in Iraqi politics, especially in southern Iraq.  The 
Minister asked for "the end of (the America's) story" for 
Iran, saying that it would help Kuwait properly invest in its 
defense posture and security measures.  He expressed GOK 
fears of a migration of terrorists out of Iraq and into 
Kuwait over the next few years, but saw a promising role for 
the private sector in the development of Iraq, specifically 
in the energy sector.  He suggested that the USG "learn from 
(America's) mistakes" in democracy-building efforts in the 
region, citing the success of Hamas and the Muslim 
Brotherhood in recent elections in the Palestinian Authority 
and Egypt as examples of democratization efforts gone awry. 
On energy supplies and policies, Shaykh Ahmed said that 
Kuwait "is not far from the U.S." on policy matters and was 
actively investing in increased production capacity.  He 
cited "geopolitical tensions" as the main reason for 
sustained high oil prices and specifically noted his concern 
for any disruptions in the shipping lanes in the Gulf. 
 
¶2.  (C) Comment:  Shaykh Ahmed has close ties to the top 
members of the ruling family and is often discussed as having 
potential to hold higher office himself someday.  He also has 
close ties to the security apparatus within Kuwait, which 
includes his brother, Kuwait State Security Director General 
Athbi Al-Fahd Al-Ahmed Al-Sabah.  In this conversation he 
didn't shy away from sharing his thoughts on Iraq, Iran, and 
numerous other issues outside of his current official 
portfolio of energy issues.  End Summary and Comment. 
 
Iran: Strategies Changing but Motivations Are the Same 
--------------------------------------------- --------- 
 
¶3.  (C) Counselor Zelikow met with Kuwait Energy Minister 
Shaykh Ahmed Al-Fahd Al-Ahmed Al-Sabah on March 19.  The 
Counselor shared USG views on developments in Iran and Iraq 
with the Minister, outlining the points that he discussed in 
separate meetings with Kuwait's Foreign Minister and 
Interior/Defense Minister (reported septel). 
 
¶4.  (C) Shaykh Ahmed agreed with the Counselor's assessment 
of the Iranian regime as problematic.  He noted that "when 
Iran started the revolution, they wanted to export it, but 
Saddam fought with them."  He said he thought the Iranian 
leadership had "changed (its) strategy, but not (its) 
causes."  He added that Iran is "still using their 
influence," and that the Iranians "have their people 
throughout the region supporting them."  He alleged that the 
Iranian government "is contacting some Kuwaiti MPs to support 
them in the next election."  (He did not identify the MPs or 
specify who he believed to be in contact with them.) 
 
¶5.  (C) The Minister said that "Iranian groups are working in 
Kuwait now" and that these groups "represent Khamenei."  If 
Kuwait continues to support its local Shi'a, he added, "we 
can solve this problem."  He said that many Kuwaiti Shi'a 
already recognize that "Iran is not the dream they thought it 
was." 
 
Iran: "Making Lots Of Problems" In Iraq 
-------------------------------------- 
 
¶6.  (C)  Shaykh Ahmed said that Iran was "making lots of 
problems" in Iraq, because Iran felt threatened by the 
growing power of important Iraqi Shi'a centers such as Najaf 
and Karbala.  He said the Iranians were afraid these cities 
"would take the place of Qom" and other important Iranian 
Shi'a holy places.  He also believed SCIRI leader Abdul Aziz 
Al-Hakim, the Badr Organization, and others were "making 
trouble in Iraq because of Iran." 
 
¶7.  (C) The Minister went on to say that he believed that 
Iran is "trying to control the south of Iraq for their 
 
KUWAIT 00001002  002 OF 004 
 
 
benefit."  He claimed to have inside information that "people 
in Kuwait believe that all of the staff of Sistani comes from 
Khamenei."  He later added that "Sistani himself is OK, but 
the people around him are Iranian-influenced." 
 
Iran: "We Need to Know the End of Your Story" 
--------------------------------------------- 
 
¶8.  (C) Without asking directly, Shaykh Ahmed was obviously 
looking for a clearer picture of USG plans concerning Iran. 
"We need to know the end of your story (for Iran)," he said. 
"If we don't know the end of the story," he added, "it is 
hard for us to participate and invest in our defense posture 
and security measures." 
 
¶9.  (C) The Minister said Iran's nuclear program was "a big 
headache for us" because Iran was "very close."  He said that 
Kuwait was following the UN Security Council deliberations on 
the Iranian nuclear issue and that Kuwait saw the issue as 
its "main problem" with Iran.  "Iranians are clever people," 
the Minister said, "and will not budge from their position 
until faced with force."  He suggested the USG work with GCC 
foreign ministers "to craft a strategy on Iran." 
 
Iraq: A Problematic South, And Possible Terrorist Migration 
--------------------------------------------- ------- 
 
¶10.  (C) The Minister said Kuwait's first concern was the 
south of Iraq, and added that it was "one of the main 
problems we will face in the future."  He said that he and 
others within the GOK "believe five to ten thousand 
terrorists will leave Iraq" in the next few years for other 
countries, such as Kuwait.  He gave as one example the 
"Peninsula Lions" group that had links to groups recruiting 
fighters for Iraq, saying that just two of them "were able to 
build a group (in Kuwait) quickly."  Without elaborating on 
specifics, he said that there is a "need for a short-term 
solution to some of these problems, not a long-term 
solution."  Shaykh Ahmed provided his view on the future 
political situation in Iraq, saying "We believe Iraq will 
become a federal system, divided into regions."  He said that 
the Iraqis "will always be against (a central) government, on 
a traditional basis." 
 
Iraq: Looking For A Large Role For Private Sector 
--------------------------------------------- ---- 
 
¶11.  (C) The Counselor briefed Shaykh Ahmed on the 
international compact idea proposed for the eventual new 
Iraqi government and the need for greater assistance from the 
GCC, and told the Minister that a "decisive move" would be 
needed by neighboring countries to support Iraq.  The 
Minister said that this overall topic could be discussed by 
the GCC foreign ministers at their next meeting.  He added 
that "if there was a reasonable government (in Iraq) with a 
clear strategy (on development), then everyone should help, 
including the private sector."  Shaykh Ahmed saw great 
promise in allowing a large role for the private sector in 
Iraq, including the "private development of the oil, water, 
electricity and housing sectors."  He said that the 
participation of foreign companies in the development of 
these sectors would help provide security for their 
investments.  Shaykh Ahmed believed GCC governments "would be 
less supportive than the private sector," but was still 
optimistic that "a lot of cash" would be provided for 
investment in Iraq from the public and private sector 
throughout the GCC. 
 
Greater Iraq-Kuwait Energy Cooperation On Horizon 
--------------------------------------------- ---- 
 
¶12.  (C) The Minister said he "would like to see more 
investment in Iraq" by Kuwait and other neighboring countries 
and believed that, with greater development of its oil 
sector, "Iraq would be richer than Kuwait."  He said that he 
did not see Iraq as a threat, but rather as "an opportunity 
for Kuwait." 
 
¶13.  (C) Kuwait and Iraq had established a joint team between 
their oil ministries, to work on issues of joint development 
 
KUWAIT 00001002  003 OF 004 
 
 
and cooperation, Shaykh Ahmed explained.  He said that, while 
"the IOCs are not able to go into Iraq yet," there were "lots 
of new private oil services companies in Kuwait" that would 
be "willing to work in Iraq."  These companies would still 
need to work with "IOC partners" in order to be covered for 
the financial risks involved. 
 
¶14.  (C) Shaykh Ahmed said that the Iraqi Oil Minister had 
been in Kuwait the day before to talk to some local and 
international companies about development of Iraq's oil 
sector.  "The companies can use Kuwait as a base" to work in 
Iraq.  He said once Iraq had rehabilitated enough of its own 
infrastructure to export gas, Kuwait could either import and 
use the gas itself or re-export it elsewhere.  For crude oil, 
however, he said that Kuwait "has an export capacity 
shortage" and that the country needs to "expand our own 
export capacity to four million bpd before offering it to 
others." 
 
Democracy-Building: "Learn From Mistakes" 
----------------------------------------- 
 
¶15.  (C)  Shaykh Ahmed turned the discussion to U.S. efforts 
to promote democracy throughout the region.  He said that 
"there were some mistakes" that needed to be studied, 
including the success of Hamas and the Muslim Brotherhood in 
recent elections in the Palestinian Territories and Egypt. 
"We're not just speaking of Al-Qaeda," he said, and went on 
to explain that there are other "emotional" and "traditional" 
elements of some regional societies that will be naturally 
"religious" and "anti-Western."  He added that "promises made 
to Arafat and Abu Mazen were not felt on the street, so the 
(recent PA election) vote was anti-Fatah." 
 
¶16.  (C) "The Middle East is going through changes," said 
Shaykh Ahmed, "and you must have societies that are ready to 
deal with these changes."  "On the political front," he said, 
"don't be too aggressive."  "Not everybody will accept this 
democratization," he added.  He seemed to see Kuwait as an 
exception though, saying that "whatever you are doing in 
Kuwait, we have people here who are doing more." 
 
Energy Supplies / Security: "Not Far from U.S. Policy" 
--------------------------------------------- --------- 
 
¶17.  (C) The Minister said that the GOK was "not far away 
from the U.S. government on energy policy," and that Kuwait 
was in the process of "increasing investment in production 
capacity."  He added that Kuwait was "re-investing all (of 
its) profits" in increasing capacity in order to meet global 
demand.  Kuwait's policies are "in line with the 
international community," he noted, adding that Kuwait was 
also investing in its downstream sector, and was always on 
the lookout for new reserves. 
 
¶18.  (C) Shaykh Ahmed repeated a position that he has made 
before to the USG: that geopolitical tensions are the 
greatest reason for the current high oil prices and that 
these issues are "not in the hands" of Kuwait.  He added that 
"60% of the geopolitical events affecting oil prices are 
here, in the Gulf."  Speaking from his experience as OPEC 
President throughout 2005, he said that he thought that, 
between now and 2020, "production will reach demand, even in 
exceptional circumstances." 
 
¶19.  (C) Turning back to Iran and the issue of energy supply 
security, Shaykh Ahmed said that "if something happens in the 
shipping lanes" in the Gulf, "this will be a big problem." 
"All of us," he added, referring to the major oil producers 
in the region,"depend on the Gulf."  He also said that he is 
concerned that Kuwait "doesn't have a missile defense system" 
capable of fending off an attack, and that "missiles could 
hit Kuwait's refineries."  He listed the main problems with 
any action in the Gulf as: the threat to the shipping lanes; 
the concentration of all of Kuwait's downstream refining and 
production facilities on the coast; and Kuwait's inability to 
knock down Silkworm missiles. 
 
¶20.  (U) Counselor Zelikow cleared on this cable. 
 
 
KUWAIT 00001002  004 OF 004 
 
 
********************************************* * 
For more reporting from Embassy Kuwait, visit: 
http://www.state.sgov.gov/p/nea/kuwait/?cable s 
 
Visit Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
 
********************************************* * 
LEBARON