VZCZCXRO2245
PP RUEHTRO
DE RUEHTU #0453 1020740
ZNR UUUUU ZZH
P 120740Z APR 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 2998
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0888
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7459
RUEHLO/AMEMBASSY LONDON PRIORITY 1290
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0877
RUEHFR/AMEMBASSY PARIS PRIORITY 1755
RUEHRB/AMEMBASSY RABAT PRIORITY 8366
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0091
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4085
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS TUNIS 000453 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG (HARRIS) 
STATE PASS USTR (BELL), USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (JAMES) 
CASABLANCA FOR FCS (ORTIZ) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: EINV EIND ENRG EPET ETRD EAIR TS
SUBJECT: MINISTER OF INDUSTRY SEEKS INCREASED US INVESTMENT 
 
REF: 06 TUNIS 2665 
 
¶1. (SBU) SUMMARY: During Ambassador's April 10 courtesy call, 
Minister of Industry, Energy, and Small and Medium Enterprise 
Afif Chelbi focused on the potential opportunities for US 
investment and expressed his readiness to meet with US 
investors.  Chelbi also highlighted the broader economic 
challenges facing the GOT: the January 2008 implementation of 
the European Union Association Agreement and creating jobs 
for new graduates.  Chelbi responded enthusiastically to 
Ambassador's mention of a potential US business delegation 
and volunteered his assistance.  END SUMMARY. 
 
¶2. (SBU) During Ambassador's courtesy call, Minister of 
Industry, Energy, and Small and Medium Enterprise Afif Chelbi 
quickly outlined two major challenges for the Tunisian 
economy: the January 2008 implementation of the EU 
Association Agreement and absorbing the growing number of 
unemployed university graduates.  Chelbi stressed that 
confronting these challenges would require Tunisia to advance 
technologically both to compete with EU entrants to the 
Tunisian market and to create skilled employment for new 
graduates. 
 
¶3. (SBU) Chelbi expressed a desire for increased US 
investment in Tunisia and highlighted several potential 
opportunities for American companies.  In particular, Chelbi 
noted the great potential in the oil and gas sector.  There 
are currently about 40 international companies in the oil and 
gas sector, but exploration has increased in response to high 
oil prices.  Chelbi stated that exploration has been 
productive and that the GOT expects production and 
consumption to be in equilibrium in 2007.  (Post will report 
septel in greater detail on potential investment opportunies 
in the oil and gas sector.)  In addition to his interest in 
attracting US oil and gas companies, Chelbi named Boeing and 
General Motors as two firms that could have sizeable 
manufacturing presences in Tunisia.  He suggested that Boeing 
could undertake long-term contracts that included production 
of parts in Tunisia and plane purchases.  He noted that 
Airbus currently produces parts in Tunisia.  (NOTE: Local 
newspapers have recently reported several Tunisair Airbus 
purchases.  END NOTE.)  While GM is currently present in 
Tunisia, Chelbi remarked that he would like to see a larger 
investment.  Ambassador raised the possibility of a US 
business delegation.  Chelbi responded enthusiastically to 
the potential visit and volunteered his own participation and 
assistance to US investors. 
 
¶4. (SBU) Ambassador raised Enerciel's ongoing dispute with 
state-owned Tunisian Electricity and Gas Company (STEG) about 
the production of wind energy (Reftel).  Chelbi, who was 
familiar with the details of Enerciel's case, stated 
unequivocally that the GOT is not interested in private 
sector wind energy.  While Enerciel had an agreement with 
STEG to collect test data for wind energy production, Chelbi 
said that GOT cost analysis revealed that the price of wind 
energy would be prohibitive.  The GOT is already subsidizing 
gas and could not afford to undertake further energy 
subsidies to Tunisian consumers.  Chelbi offered to provide 
the Embassy with the cost analysis conducted on wind energy. 
Chelbi added that while almost all of the remaining 
state-owned industrial entities would be privatized, energy 
provision would remain public.  (NOTE: Post will follow up on 
this meeting with the Ministry and with Enerciel.  END NOTE.) 
GODEC