VZCZCXRO9980
PP RUEHQU
DE RUEHPU #1905/01 2771936
ZNY CCCCC ZZH
P 041936Z OCT 06
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 4249
INFO RUEHZH/HAITI COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 1247
RUEHSA/AMEMBASSY PRETORIA PRIORITY 1088
RUEHQU/AMCONSUL QUEBEC PRIORITY 0593
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 PORT AU PRINCE 001905 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/CAR 
WHA/EPSC FOR FAITH CORNEILLE, ED MARTINEZ 
EB/IFD 
STATE PASS TO USAID FOR LAC/CAR 
TREASURY FOR JEFFERY LEVINE 
COMMERCE FOR SCOTT SMITH 
 
E.O. 12958: DECL: 10/04/2016 
TAGS: ENRG EPET ECON EAID HA
SUBJECT: GOH INTENDS TO MEET 100% FUEL DEMAND WITH 
PETROCARIBE 
 
REF: A. PAP 856 
 
     ¶B. PAP 1377 
     ¶C. PAP 1205 
     ¶D. PAP 1483 
 
PORT AU PR 00001905  001.2 OF 002 
 
 
Classified By: Ambassador Janet A. Sanderson for reasons 1.4 (b) and (d 
). 
 
¶1.  (C) Summary: President Rene Preval and finance minister 
Daniel Dorsainvil informed the four oil companies operating 
in Haiti of intentions to meet 100 percent of Haiti's 
petroleum demand through its Petrocaribe agreement. 
According to a Christian Porter, country manager for 
ExxonMobil (operates as Esso in Haiti), the international oil 
companies were shocked; they thought they would still have 
the right to import their own oil, with Petrocaribe supplying 
only part of Haiti's petroleum demand.  Of the four 
companies, only the domestic oil company, Dinasa, which has 
been asked by President Rene Preval to manage and control 
Petrocaribe stock, was not surprised by the government's 
announcement.  Dinasa employee Michel Guerrier thinks the 
President's plan is a long shot at best.  Post agrees with 
Guerrier.  Essentially, President Preval is asking the oil 
companies to operate with petroleum purchased solely from 
Petrocaribe via the GOH.  End Summary. 
 
¶2.  (C) Porter told econoff that the President asked the four 
companies for their position on Petrocaribe supplying 100 
percent of Haiti's petroleum: Dinasa (a Haitian oil company) 
and Total (French) representatives agreed with the 
proposition, the Chevron (operates as Texaco) representative 
said it is not his decision, and the ExxonMobil 
representative said nothing.  (Porter explained that Chevron 
and ExxonMobil were not appropriately represented because 
Preval called the meeting only the day before and they had 
not been alerted to the broad scope of the proposal.) 
According to Porter, Preval took this to be an unofficial 
agreement between the GOH and the international oil 
companies, and is now encouraging the oil companies to 
communicate directly with Venezuela.  Porter, speaking for 
both ExxonMobil and Chevron, stressed that they would not be 
willing to do this because they would lose their off-shore 
margins and because of Petrocaribe's unreliable reputation. 
Under existing arrangements, a tanker arrives every two weeks 
and its contents are distributed to the four oil companies. 
Porter noted that Preval did not explicitly prohibit the oil 
companies from importing oil, at least not yet. 
 
¶3.  (C) Michel Guerrier, an employee of Dinasa told econoff 
October 2 that the government may intend to import 100 
percent of Haiti's petroleum through Petrocaribe but Guerrier 
doubted that this plan would be realized.  He said the GOH 
does not have the means or capacity to manage 100 percent of 
Haiti's petroleum supply, as seen by their experience with 
the first 100,000 barrels of Petrocaribe fuel, and thus is 
looking for help from the oil companies.  (Note:  The first 
and only Petrocaribe shipment of 100,000 barrels of refined 
fuels arrived May 14, but the GOH was unable to completely 
unload it until mid-August (reftels A and B), and is still 
having difficulty selling the petroleum to the two interested 
buyers, Total and Dinasa, because the world market price for 
oil has since dropped.  Storage is at a premium in Haiti, and 
transportation is difficult and expensive because of 
poorly-maintained roads.  Representatives of the two U.S. oil 
companies told Ambassador early June that they do not make a 
profit selling fuel in Haiti; their only profit is through 
off-shore margins.  End note.) 
 
¶4.  (C) Comment:  The Petrocaribe agreement continues to 
advance in theory.  In practice, however, the agreement has 
been stalled ever since the initial shipment arrived in May. 
In discussions with the Ambassador early June, Edouard 
Baussan (vice-president of Dinasa and Preval's point person 
on Petrocaribe) agreed with the Ambassador that the GOH was 
not capable of handling petroleum logistics like insurance, 
transportation, storage and distribution.  He also pointed 
out that the government is wary of disturbing distribution 
channels established by the four oil companies (reftel C). 
It seems that Preval wants to have his cake and eat it too: 
 
PORT AU PR 00001905  002.2 OF 002 
 
 
he has asked that the oil companies participate in the 
logistical and commercial process, whereby the GOH buys and 
sells the petroleum (and benefits from the preferential terms 
of the agreement, which GOH officials estimate will total 
about USD 100 million per year (reftel D)) and then give 
responsibility to the oil companies for the management of 
storage and distribution of the product.  This is a dubious 
proposal that neither the U.S. oil companies in Haiti -- 
responsible for about 45 percent of Haiti's petroleum imports 
-- nor Venezuela, for that matter, is likely to agree to. 
The Ambassador plans to meet with ExxonMobil representatives 
next week.  Post will continue to follow Haiti's plan for 
implementation of Petrocaribe and update as appropriate. 
SANDERSON 
=======================CABLE ENDS============================