VZCZCXRO3202
PP RUEHQU
DE RUEHPU #0846 1321906
ZNR UUUUU ZZH
P 121906Z MAY 06
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 3010
INFO RUEHZH/HAITI COLLECTIVE
RUEHBR/AMEMBASSY BRASILIA 1033
RUEHCV/AMEMBASSY CARACAS 3203
RUEHSA/AMEMBASSY PRETORIA 0878
RUEHQU/AMCONSUL QUEBEC 0460
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS PORT AU PRINCE 000846 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/CAR 
WHA/EPSC FOR FAITH CORNEILLE 
EB/IFD 
STATE PASS TO USAID FOR LAC/CAR 
TREASURY FOR JEFFERY LEVINE 
COMMERCE FOR SCOTT SMITH 
 
E.O. 12958: N/A 
TAGS: ENRG ECON EFIN EINV EAID HA
SUBJECT: PETROCARIBE OIL MAY FLOW THROUGH EDH 
 
¶1.  This message is sensitive but unclassified: please 
protect accordingly. 
 
¶2.  Michel Guerrier, Director of National, Haiti's only 
domestic oil company, told Econoff May 11 that a ship with 
100,000 barrels of PetroCaribe oil has embarked for Haiti and 
is due to arrive on or before May 15.  However, Haiti and 
Venezuela have yet to decide how to sell PetroCaribe oil to a 
country without a state-owned oil company.  Guerrier said the 
decision will be made before President-elect Rene Preval 
signs the agreement on May 15, the day after his 
inauguration.  Guerrier said one possibility is that 
PetroCaribe will sell the oil to Haiti's National Electricity 
Company (Electricite d,Haiti -- EDH), which will then sell 
to the four oil companies operating in Haiti: Texaco, Esso 
(a.k.a. Exxon), National (formally Shell), and Total. 
 
¶3.  Guerrier stressed that this is a great deal for the 
Haitian government.  He suggested that the government will 
continue to sell the oil at the Caribbean posting price, but 
will purchase it at the slightly reduced PDVSA (Petroleum of 
Venezuela, Inc.) price.  This will allow the government a 
slight profit in addition to the advantage offered by the 
PetroCaribe deal: 60 percent of the oil is to be paid for 
over 90 days with no interest and the remaining 40 percent is 
to be paid for over a period of 25 years, with a one percent 
interest rate.  Guerrier also speculated that the government, 
in order to retain total control over the supply of the oil 
market (they already control the price), may put an end to 
the non-PetroCaribe oil-bearing ship which arrives every 
three weeks. 
 
¶4.  Comment:  Guerrier underscores the incentives PetroCaribe 
offers the incoming government.  Strapped for cash and oil, 
PetroCaribe provides both in a package deal too good to pass 
up.  Preval told the press on May 10 that his friendship with 
Venezuela and Cuba were not formed out of ideology, but out 
of necessity.  EDH, an inefficient and corrupt public entity, 
is possibly one of the worst options as the government's oil 
handler.  Corruption and mismanagement keep the company from 
providing electricity consistently.  However, filtering oil 
through EDH could ensure enough fuel to power the electricity 
plants, without relying on the oil companies as a costly 
back-up plan. 
SANDERSON 

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