VZCZCXRO6271
PP RUEHQU
DE RUEHPU #0830/01 1242123
ZNR UUUUU ZZH
P 042123Z MAY 07
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 6011
INFO RUEHZH/HAITI COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 1526
RUEHSA/AMEMBASSY PRETORIA PRIORITY 1347
RUEHQU/AMCONSUL QUEBEC PRIORITY 0802
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 PORT AU PRINCE 000830 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NSC FOR FISK 
STATE FOR WHA/CAR 
S/CRS 
DRL 
WHA/EPSC FOR FAITH CORNEILLE, ED MARTINEZ 
EB/IFD 
TREASURY FOR JEFFREY LEVINE 
COMMERCE FOR SCOTT SMITH 
 
E.O. 12958: N/A 
TAGS: ENRG EPET ECON EAID HA
SUBJECT: GOH SETS JULY 1 PETROCARIBE DEADLINE 
 
REF: A. PORT AU PRINCE 819 
 
     ¶B. PORT AU PRINCE 522 
     ¶C. PORT AU PRINCE 78 
     ¶D. 06 PORT AU PRINCE 1905 
 
PORT AU PR 00000830  001.2 OF 002 
 
 
¶1.  This message is sensitive but unclassified -- please 
protect accordingly. 
 
¶2.  (SBU) Summary: ExxonMobil representatives, led by 
Caribbean Sales Manager Bill Eisner, told Ambassador 
Sanderson on April 26 that the head of Haiti's Petrocaribe 
office, Michael Lecorps, gave the four oil companies 
operating in Haiti until July 1 to sign the GoH contract on 
Petrocaribe.  ExxonMobil's final message to the GoH, based on 
their overall industry experience and Petorcaribe's record in 
the region, was that the contract should allow for some 
percentage of fuel imported from suppliers other than 
Venezuela's energy company, PDVSA.  Eisner explained that the 
GoH will buy the fuel from Venezuela and sell it to the oil 
companies but expects the oil industry to otherwise 
coordinate the supply, shipping and storage aspects of the 
agreement directly with Venezuela.  In various meetings, 
Lecorps has told Poloff that revisions to the Petrocaribe 
agreement signed by Haiti and Venezuela (refs A and B) have 
not changed anything for him, and that the arrival of the 
first Petrocaribe shipment will ''take time.''  End Summary. 
 
¶3.  (SBU) In a meeting with the Ambassador, Eisner and his 
colleagues recounted their meeting with Lecorps and finance 
ministry representatives on April 26.  They all speculated 
that the July 1 deadline will ''come and go,'' but they did 
not voice their doubts to the GoH officials.  Instead, Eisner 
focused on his concerns about the price structure of the 
agreement, the danger of relying on a single supplier, and 
the transport complications that would result from 
implementation of the agreement.  Eisner and Lecorps also 
discussed the Dominican Republic's Petrocaribe experience, 
which has been a ''total disaster.''  In an earlier meeting, 
Lecorps told Poloff he was aware of all the technical 
difficulties, in terms of supply, transport and storage that 
the Dominican Republic was having with Petrocaribe.  However, 
he later stated that the GoH had modified its contract with 
Venezuela so that it would not have the same problems as the 
Dominican Republic.  (Note: When Venezuelan President Hugo 
Chavez visited Haiti mid-March, Preval forced him to sign a 
document allowing the oil companies to ship Petrocaribe 
products free on board (FOB) to Haiti -- refs B and C) 
 
¶4.  (SBU) Eisner assured the GoH that ExxonMobil understands 
that the financial benefits are attractive to Haiti.  The 
company is willing to work with the GoH to implement the 
agreement, but not under the current proposal. (Note: The GoH 
declared that Venezuela would supply 100 percent of Haiti's 
energy needs in September, 2006 (ref D).  End note.)  The 
current contract turns the Haitian government into 
ExxonMobil's sole supplier, a responsibility the GoH is not 
ready to handle, according to Eisner.  Eisner noted that 
Haiti would be the only Caribbean country to import 100 
percent of the country's fuel demand through the Petrocaribe 
agreement: Jamaica currently receives 25,000 of 70,000 
barrels per day (b/d) and the Dominican Republic 50,000 of 
150,000 b/d. 
 
¶5.  (SBU) Eisner said he was shocked when he realized that 
Lecorps expected the oil industry to coordinate the 
Petrocaribe deal on behalf of the GoH.  According to Eisner, 
the contract proposed by the GoH would make the oil industry 
prisoner to two incompetent governments, negating much of the 
industry's role in coordination.  He also said that Lecorps, 
and presumably the GoH, hopes the four companies will sign 
the agreement voluntarily, instead of passing legislation 
obliging oil companies operating in Haiti to participate in 
the Petrocaribe agreement.  Eisner observed that Lecorps 
seemed under extreme pressure from the GoH to turn the 
Petrocaribe agreement into tangible results. 
 
 
PORT AU PR 00000830  002.2 OF 002 
 
 
¶6.  (SBU) Comment: Not a drop of petroleum has resulted from 
the initial agreement that newly inaugurated President Preval 
and the Venezuelan Vice President signed in May, 2006. 
Still, the GoH believes the agreement will bear fruit 
sometime this year, according to Lecorps.  As ExxonMobil and 
Texaco (responsible for 45 percent of Haiti's total supply) 
representatives have told the Ambassador, they continue to 
ship fuel to Haiti regularly, and nothing so far has 
threatened to interfere.  Lecorps told Poloff on May 2 that 
his superiors in the GoH ''do not understand the technical 
difficulties the Petrocaribe agreement entails,'' complaining 
that they expected him to move too quickly.  Post has had the 
same experience with various GoH officials, who have 
demonstrated in conversations with the Ambassador and others 
that they have no expertise with the petroleum logistics. 
They understand the immediate financial benefits but have not 
thought through the rest, expecting that the oil companies 
will come through with their logistical know-how. 
SANDERSON 

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