VZCZCXRO1525
PP RUEHQU
DE RUEHPU #0078/01 0181359
ZNY CCCCC ZZH
P 181359Z JAN 07
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 5088
INFO RUEHZH/HAITI COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 1382
RUEHSA/AMEMBASSY PRETORIA PRIORITY 1209
RUEHQU/AMCONSUL QUEBEC PRIORITY 0691
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 000078 
 
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 JEFFREY LEVINE 
COMMERCE FOR SCOTT SMITH 
 
E.O. 12958: DECL: 01/18/2017 
TAGS: ENRG EPET ECON EAID HA
SUBJECT: GOH ON PETROCARIBE: STOKING THE FIRES 
 
REF: A. 06 PORT AU PRINCE 1618 
     ¶B. PORT AU PRINCE 55 
     ¶C. 06 PORT AU PRINCE 846 
     ¶D. 06 PORT AU PRINCE 2418 
     ¶E. 06 PORT AU PRINCE 1905 
     ¶F. 06 PORT AU PRINCE 1960 
 
PORT AU PR 00000078  001.2 OF 002 
 
 
Classified By: Charge d'Affaires Thomas C. Tighe for reasons 1.4 (b) an 
d (d). 
 
¶1.  (C) Summary: Michel Lecorps, the newly-appointed head of 
the independent monetization office (formally known as the 
PL-480 office), met with Poloff January 10 to discuss 
Petrocaribe implementation in Haiti.  Lecorps, apparently 
infuriated by Chevron's lack of cooperation with the GoH, 
stressed that Petrocaribe is no longer negotiable; it has 
been ratified by parliament (ref A) and the GoH is working to 
implement the agreement early this year.  Chevron country 
manager Patryck Peru Dumesnil confirmed his company's 
anti-Petrocaribe position and said that ExxonMobil, the only 
other U.S. oil company operating in Haiti, has told the GoH 
that it will not import Petrocaribe products.  Lecorps and 
separately, President Preval's economic advisor, Gabriel 
Verret, outlined problems Haiti was likely to have with the 
agreement, such as the usage of a national company (like 
Jamaica's national refinery, Petrojam) to control Petrocaribe 
 Verret speculated that Venezuela (BRV) wanted its 
beneficiary countries to have a national company so that the 
BRV could eventually buy into it, as it reportedly plans to 
do with Petrojam.  Verret also discussed lessons he and 
Lecorps learned in Jamaica January 3 -7 (ref B), notably that 
it is important to separate the "commercial from the 
political" aspects of the Petrocaribe plan.  End summary. 
 
¶2.  (U) Lecorps said the GoH struggled to find a home office 
for Petrocaribe  At the BRV's suggestion, the GoH tried to 
shift the responsibility to the national electricity company 
(EDH, ref C) to meet the agreement's initial requirements. 
Lecorps said that the GoH would like to run Petrocaribe 
through a national company, but, without a suitable one or 
the capacity to create one, the GoH gave Lecorps' office the 
Petrocaribe program.  Haiti and Venezuela have not agreed 
upon the specifics of the Petrocaribe plan, but Lecorps said 
that Venezuela will most likely accept Haiti's plan to 
control Petrocaribe through his office. 
 
Chevron says "No" to Petrocaribe 
- - - - - - - - - - 
 
¶3.  (C) Lecorps said that the GoH solicited the input and 
participation of the four oil companies operating in Haiti -- 
Chevron (operates as Texaco), ExxonMobil (operates as Esso), 
Total and Dynasa -- but that "one company" refused to move 
forward with the discussions because "their representatives 
would rather import their own petroleum products."  (Note: In 
a separate meeting with the Ambassador, Chevron 
representatives outlined the problems posed by Petrocaribe 
(ref D).  Poloff later confirmed with Chevron's country 
manager Patryck Peru Dumesnil that Chevron is the company to 
which Lecorps referred, but Dumesnil said that ExxonMobil has 
made it clear that it will not cooperate with the current GoH 
proposal either.  Post is uncertain why Lecorps mentioned 
Chevron as the only company not cooperating.  End note.) 
Lecorps was enraged that "an oil company which controls only 
30 percent of Haiti's petroleum products" would have the 
audacity to try and elude an agreement that would benefit the 
Haitian population.  Ultimately Lecorps defended his position 
with the argument that the companies should want what is best 
for their local consumer, and be willing to make concessions 
to the GoH to this end.  Lecorps stressed that the GoH would 
not be held hostage to "capitalist attitudes" toward 
Petrocaribe and that if the GoH could not find a compromise 
with certain oil companies, the companies may have to leave 
Haiti. 
 
¶4.  (C) Verret confirmed that Chevron is not buying into the 
agreement (but said nothing about ExxonMobil), and thought 
that perhaps the GoH could work out a deal, whereby Chevron 
imports its petroleum from an independent source while 
 
PORT AU PR 00000078  002.2 OF 002 
 
 
maintaining its shared shipment with the other oil companies. 
 (Note: Currently, Chevron manages the shipping for the four 
oil companies, which share a tanker to import one petroleum 
shipment every two to three weeks.  Total oil demand in Haiti 
is around 11,000 barrels per day.  With the limited storage 
available in Haiti, the companies could not afford to ship 
separately to Haiti.  End note.) 
 
¶5.  (C)   According to Dumesnil, ExxonMobil and Chevron have 
told the GoH that neither company can work within the GoH's 
proposed framework to import 100 percent of petroleum 
products via Petrocaribe (ref E and F).  (Note: Together, 
ExxonMobil and Chevron supply 49 percent of all oil products 
in Haiti.  End note.)  Of the four companies, Dumesnil said, 
there are three levels of discussion with the GoH: the U.S. 
companies stand together in opposition to the current 
proposal; Total is discussing the agreement but has not 
promised cooperation; and the only local company, Dynasa, has 
pledged cooperation.  Dumesnil said that the GoH is moving 
too quickly with the agreement, that it has not presented a 
written plan, and most importantly, does not have full 
industry cooperation. 
 
Lack of Storage, No Refinery Limits Haiti's Leverage 
- - - - - - - - - - 
 
¶6.  (C) Lecorps outlined some obstacles the GoH faces with 
implementation, the greatest being the lack of storage space 
in Haiti.  Recalling the run on fuel at the pump for two days 
in late November and again in late December, Lecorps said 
that one of the biggest challenges will be ensuring 
consistent shipments, because Haiti does not have the 
capacity to store reserves.  Lecorps also admitted that the 
GoH had very little knowledge of industry operations in Haiti 
and that it would need industry cooperation for the know-how, 
as much as for the infrastructure. 
 
¶7.  (C) Verret told Poloff that Haiti would like to model 
Jamaica's shipping agreement with Venezuela, which stipulates 
that Jamaica can choose whether to have the petroleum shipped 
by Venezuela or an independent carrier.  According to Verret, 
Jamaican officials told the Haitians that 90 percent of the 
time Jamaica imports its own crude oil, because "shipping is 
not BRV's forte."  Verret said that Haiti will seek a "free 
on board (FOB) plus" agreement by which Venezuela will take 
care of the shipping unless Haiti finds a better deal. 
Verret noted, however, that though this works in Jamaica, 
Haiti does not have Jamaica's advantages of extra storage 
space and a national refinery, which means regular and timely 
shipments of refined fuel are necessary (Haiti can not order 
in advance or wait for good deals). 
 
¶8.  (C) Comment: Both Lecorps and Verret, like other Haitian 
officials on Petrocaribe focused primarily on the cost 
benefits (estimated to be USD 100 million per year) to the 
GoH, which would be used for social projects like schools and 
hospitals, per Verret.  However, Lecorps' self-control 
wavered while discussing industry cooperation and other 
modalities of implementation.  He seemed overwhelmed by -- 
yet extremely proud of -- his new responsibility, and was 
incapable of addressing minor complications.  Often, instead 
of addressing the specifics, Lecorps reiterated that 
Petrocaribe will work for Haiti, be well-run, and create 
enormous benefits for the country: but his insistence was 
such that he seemed to be trying to convince himself as much 
as anyone else.  End comment. 
TIGHE 

=======================CABLE ENDS============================