VZCZCXRO8637
PP RUEHQU
DE RUEHPU #1253 2011926
ZNR UUUUU ZZH
P 201926Z JUL 07
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 6546
INFO RUEHZH/HAITI COLLECTIVE PRIORITY

UNCLAS PORT AU PRINCE 001253 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/EX AND WHA/CAR 
S/SRS 
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 PGOV PREL HA
SUBJECT: PETROCARIBE STILL STALLED 
 
REF: PORT AU PRINCE 830 
 
¶1. This message is sensitive but unclassified -- please 
protect accordingly. 
 
¶2. (SBU) SUMMARY: Negotiations between the GOH and fuel 
vendors operating in Haiti to implement the PetroCaribe 
agreement with Venezuela remain stalled. The GoH sought to 
conclude arrangements by July 1 (reftel), but the head of 
Haiti's PetroCaribe Office, Michael Lecorps, revealed to 
Econoff that the GoH will not yet attempt to impose a 
deadline on the companies.  In separate conversations with 
Econoff in early July, representatives from Texaco and Esso 
continue to worry about depending on a sole supplier 
(Venezuela) for the Haitian market, local insecurity, and the 
worsening relationship between the USG and the Chavez 
government.  Officials from the locally-owned Dynasa chain of 
gas stations sympathize with their industry colleagues, but 
affirmed that Dynasa will adhere to GoH policy.  Though all 
parties expect they will conclude some kind of agreement, we 
see impetus to resolve the issues between them in the near 
term. End Summary. 
 
¶3. (SBU) Lecorps on July 5 confirmed to Econoff that the GoH 
was struggling to come to terms with Texaco, Esso, Total, and 
Dynasa to implement the PetroCaribe agreement.  A GoH meeting 
with the firms on July 3 produced no agreement, and Lecorps 
admitted that the GoH had imposed no new deadline, though he 
maintained that the discussions remained urgent and would 
continue throughout July.  Lecorps was confused as to why 
U.S. companies are unwilling to purchase their oil from a 
sole supplier, noting they already purchase 99.9 percent of 
their oil from Venezuela's state oil company (PDVSA), the 
same vendor that the GoH will use.  Lecorps emphasized the 
GOH's flexibility and patience in dealing with the firms, 
recognizing they provide an essential service to Haiti. He 
stressed the need for collaboration between the government 
and the oil companies, but insisted that the GoH will take 
the necessary measures to implement PetroCaribe. 
 
¶4. (SBU) Eustache St. Lott, Area Manager for Esso in Haiti, 
told Econoff that purchasing oil solely from the GOH is not 
in Esso's best interest given Haiti's unpredictable security 
situation and past instability.  Chevron's Retail District 
Manager Patryck Peru-Dumesnil concurred with St. Lott that 
negotiations continue to drag because of the reservations of 
upper management. Peru-Dumesnil stated that the Haitian 
market is profitable, but is uncertain of the financial 
impact, particularly on retailers.  He confirmed the 
possibility that Shell could take the place of Chevron in 
transporting petroleum to Haiti if Chevron chooses not accept 
new terms. 
 
¶5. (SBU) Michel Guerrier, the general controller of Dynasa, 
affirmed to Econoff on July 10 that while Dynasa was in the 
same situation as the other gasoline vendors, as a locally 
owned enterprise it is obliged to support the GoH.  He 
claimed the primary obstacle in the negotiations was 
Chevron's reluctance to come to terms to continue to deliver 
petroleum to Haiti.  The GOH, he surmised, does not want to 
resort to pressure, but will do so if the companies do not 
demonstrate willingness to conclude a new arrangement. 
 
¶6. (SBU) Comment: Representatives seem to accept that the 
government may eventually force them to accept PetroCaribe 
terms, but in the near term, they appear to hold most of the 
negotiating cards.  Haiti depends entirely on the private 
firms to manage the import, distribution, and sale of 
gasoline and other petroleum products and has no other 
expertise at hand.  In light of Haiti's weak infrastructure 
and precarious distribution system, the departure of any of 
the four companies from the market could severely disrupt the 
supply of gasoline throughout the country.  GoH has already 
negotiated an exemption from the standard PetroCaribe 
agreement requiring it to manage the accord through a 
state-owned oil company. 
SANDERSON 

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