VZCZCXRO8968
PP RUEHQU
DE RUEHPU #1960/01 2861546
ZNR UUUUU ZZH
P 131546Z OCT 06
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 4306
INFO RUEHZH/HAITI COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 1256
RUEHSA/AMEMBASSY PRETORIA PRIORITY 1095
RUEHQU/AMCONSUL QUEBEC PRIORITY 0600
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 PORT AU PRINCE 001960 
 
SIPDIS 
 
SENSITIVE 
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: N/A 
TAGS: ENRG EPET ECON EAID HA
SUBJECT: U.S. OIL INDUSTRY RESPONSE TO GOH PETROCARIBE 
PROPOSAL 
 
REF: PAP 1905 
 
PORT AU PR 00001960  001.2 OF 002 
 
 
(SBU) 1.  Summary: Post met with representatives of the two 
U.S. oil companies operating in Haiti, ExxonMobil (operates 
as Esso) and Chevron (operates as Texaco), following 
President Rene Preval's September 27 announcement of GOH 
intentions to import 100 percent of Haiti's fuel demand from 
Petrocaribe (reftel).  Though representatives of both 
companies were shocked by the announcement, ExxonMobil 
representatives expressed strong reservations, whereas Texaco 
representatives had a more passive response, stating that 
they would go along with it if the playing field was level 
for all of the oil companies in Haiti.  Neither company has 
informed the government of their concerns with the proposal 
to supply all of Haiti's fuel through Petrocaribe.  Post 
encouraged the two companies to do so.  Despite the 
Ambassador's numerous attempts to discuss (and discourage) 
GOH intentions to move forward with the Petrocaribe 
agreement, the GOH insists the agreement, implemented in 
full, will result in a net gain for Haiti.  GOH officials 
recognize their limited capacity -- to manage, import, 
supply, transport and distribute -- all of Haiti's fuel, but 
hope to implement the preferential payment plan while leaving 
the logistics to the private companies.  End Summary. 
 
(SBU) 2.  Both companies were shocked by the government's 
intentions to import 100 percent of Haiti's fuel from 
Petrocaribe.  ExxonMobil representatives speculated that 
perhaps Venezuela said that it could meet 100 percent of 
Haiti's fuel demand and that the GOH is simply exploring 
whether or not it could manage and control that much 
petroleum (about 11,000 barrels per day), despite its limited 
capacity.  ExxonMobil and Chevron reps said that the GOH 
knows nothing about the supply side of petroleum, and that 
clearly a lack of information on the government's part 
motivated their most recent declaration.  They argue that if 
the GOH understood what it took to supply petroleum to Haiti, 
it would know better than to disrupt the process and that if 
the GOH had any technical expertise it would not need to ask 
for the participation of the oil companies.  Both companies 
also noted that President Preval does not want to discuss the 
details of the agreement and has remained ambiguous about his 
intentions. 
 
(SBU) 3.  Chevron and ExxonMobil representatives have not 
openly expressed their reservations to the government. 
Following Preval's September 27 meeting with all four oil 
companies (ExxonMobil, Chevron, Total, and Dinasa), the oil 
industry association (Association des Professionals du 
Petrole -- APP) received an invitation to meet with 
representatives of the Venezuelan oil company who were in 
Haiti.  All four companies refused to attend.  Also, the 
companies received letters separately requesting information 
on importation and distribution from the GOH on October 9. 
So far, no one has responded. 
 
(SBU) 4.  The representatives also noted (in separate 
meetings) that a Cuban transport company, Transalba, will 
ship the petroleum from Venezuela to Haiti, and that as U.S. 
companies, they would not be allowed to work directly with 
the Cuban vessel.  Also, they said that the first and only 
shipment of Petrocaribe fuel, which arrived May 14, would 
never have passed their inspections -- because of the type of 
ship and because it was uninsured.  ExxonMobil also gave 
examples of the difficulties it would have with working with 
Petrocaribe due to Exxon's high standard of quality and 
necessary product inspections.  (Note: ExxonMobil and Chevron 
are responsible for 45 percent of total fuel demand in Haiti, 
12 percent and 33 percent respectively.  Chevron is the sole 
supplier of the airline industry (they have a station right 
next to the airport), which accounts for about three percent 
of total demand.  End note.) 
 
(SBU) 5.  Comment: Ambassador has discussed Petrocaribe with 
a number of GOH officials, including President Preval and his 
two closest advisors, Bob Manuel and Gabriel Verret.  Though 
they usually agree with the Ambassador's numerous and valid 
points (from specific logistical complications to the larger 
 
PORT AU PR 00001960  002.2 OF 002 
 
 
negative message that this would send to the international 
community at a time when the GOH is trying to increase 
foreign investment), they argue that the economic benefits to 
Haiti are too good to miss.  In fact, the President 
attributes the Ambassador's concern to the political impasse 
between the U.S. and Venezuela.  It is clear that President 
Preval and his inner circle are seduced by the payment plan 
for Petrocaribe fuel (by which the government pays for 60 
percent over a 90 day period and 40 percent over a period of 
25 years at a one to two percent interest rate).  The Embassy 
will continue to discuss Petrocaribe with GOH official and 
the industry representatives. 
SANDERSON 

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