VZCZCXRO8406
RR RUEHHM
DE RUEHHI #0711 1650809
ZNR UUUUU ZZH
R 130809Z JUN 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 8017
INFO RUEHHM/AMCONSUL HO CHI MINH 4856

UNCLAS HANOI 000711 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG ECON EPET ETTC IR PREL VM
SUBJECT: PETROVIETNAM STILL NEGOTIATING DETAILS OF IRAN INVESTMENT 
 
REF: A) HANOI 314; B) STATE 59820 
 
¶1. (SBU) On June 10, poloff discussed Ref B points about reports of 
PetroVietnam's investment in Iran's energy sector with MFA West Asia 
and Africa Department specialist Nguyen Quynh Phuong.  Ms. Phuong 
said the two sides are still negotiating details of the investment. 
She characterized the agreement signed in March as "more than a 
memorandum of understanding, but not a firm contract."  According to 
Phuong, the deal will be scuttled only if the two sides are not able 
to reach agreement on remaining technical and commercial terms.  She 
was not able to provide an estimated value for the transaction. 
Phuong also said there has been no further progress on a second Iran 
project that PetroVietnam is pursuing jointly with Belarus (Ref A). 
 
¶2. (SBU) Phuong emphasized that the GVN always respects UN Security 
Council resolutions and that PetroVietnam's Iran deal had been 
structured with attention to compliance with Iran sanctions.  The 
banks and Iranian partners in the transaction were reviewed and 
selected with an eye to insuring that they are not entities listed 
in the resolutions. 
 
¶3. (SBU) While acknowledging U.S. concerns that the deal could send 
a wrong message to the Iranian Government, Phuong pointed out that 
the GVN would like to maintain friendly relations with Iran.  By 
cooperating in the energy sector, Phuong suggested that the GVN may 
have an opportunity to influence Iran with regard to other issues. 
The GVN approach is "to build its bilateral relationship with Iran, 
rather than to isolate Iran."  Phuong said she would pass U.S. 
concerns about the Iran deal to the MFA leadership for its 
consideration. 
 
ALOISI