Alan E Eyre  11/18/2008 12:06:37 PM  From  DB/Inbox:  Chron

Cable 
Text:                                                                      
                                                                           
      
C O N F I D E N T I A L        BAKU 01097
BAKUCX:
    ACTION: POLECON
    INFO:   AMB POLMIL DCM PD

DISSEMINATION: POLECON
CHARGE: PROG

APPROVED: DCM:DLU
DRAFTED: POLECON:AEEYRE
CLEARED: NONE

VZCZCKBI597
PP RUEHC RUCNCIS RUCNMEM RHMFISS RUEAIIA RHEBAAA
RUEKDIA RUEKJCS RUEKJCS RHEHNSC RHEHAAA
DE RUEHKB #1097/01 3221354
ZNY CCCCC ZZH
P 171354Z NOV 08
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC PRIORITY 0381
INFO RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUEAIIA/CIA WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEKDIA/DIA WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEHNSC/NSC WASHDC
RHEHAAA/WHITE HOUSE WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 BAKU 001097 
 
E.O. 12958: DECL: 11/18/2018 
TAGS: PGOV PREL ENRG AJ TK
SUBJECT: BAKU ENERGY SUMMIT ADVANCES U.S. EURASIAN ENERGY 
POLICY 
 
Classified By: Deputy Chief of Mission Donald Lu, Reasons 1.4 (b,d) 
 
¶1. (C) SUMMARY:  On November 13-14 Azerbaijan President Ilham 
Aliyev hosted the IV Energy Summit in Baku, following up on 
previous energy summits in Krakow (May 2007), Vilnius 
(October 2007) and Kyiv (May 2008).  Prominent attendees 
included the Heads of State of Turkey, Georgia, Ukraine, 
Lithuania and Poland.  During the Summit Kazakhstan and 
Azerbaijan signed a key agreement on transport of Kazakh oil, 
and Azerbaijan and Georgia signed a multi-year gas supply 
contract, Georgia's first multi-year gas contract since its 
independence.  Additionally, Turkish President Gul told USG 
Presidential Delegation members that he sought to cooperate 
with Azerbaijan on removing the current barriers as the way 
of actualizing the Southern Corridor for gas, but that he 
wished to do so "quietly, without bragging," so as not to 
irritate Russia. 
 
¶2. (C) SUMMARY (continued):  Summit Speeches and the Summit's 
Final Declaration, endorsed by Summit participants with the 
notable exception of Turkmenistan and Kazakhstan, stressed 
adhering to the fundamental principles of the Energy Charter 
Treaty and to diversifying energy sources and routes.  The 
Declaration's key passage mentioned supporting "joint 
projects directed to the strengthening of energy security of 
Europe, especially gas transit projects, including those 
across the territories of Georgia and Turkey, including TGI, 
Nabucco, and others."  Opposition Azerbaijani press referred 
to the Summit as "the Meeting of Russia's Enemies," as 
Georgia, Poland and Lithuania were clear in their 
denunciation of Russia's use of the "energy weapon."  END 
SUMMARY. 
 
¶3. (U) On November 13-14 Azerbaijan President Ilham Aliyev 
hosted the IV Energy Summit in Baku, following up on previous 
energy summits in Krakow (May 2007), Vilnius (October 2007) 
and Kyiv (May 2008).  Prominent Heads of State attendees 
included the Presidents of Turkey, Georgia, Ukraine, 
Lithuania and Poland, with non-HOS representation from 
Bulgaria, Estonia, Greece, Hungary, Italy, Latvia, Romania, 
Switzerland, and, from the EU, Energy Commissioner Andris 
Piebalgs (see Appendix for a fuller list of attendees). 
 
¶4. (C) The three-person U.S. Presidential Delegation was 
headed by Energy Secretary Bodman, with Special Envoy for 
Eurasian Energy Diplomacy C. Boyden Gray and Ambassador Derse 
being the other two official members of the White 
House-designated Presidential Delegation.  EUR DAS Bryza, in 
Baku for Minsk Group activities, also participated in all 
major Summit-related activities.  In addition to attending 
the November 14 Summit itself, Secretary Bodman had separate 
bilateral meetings with President Aliyev (septel), Turkish 
President Gul, and Ukraine President Yushchenko. 
 
NOVEMBER 13 MINISTERIAL 
----------------------- 
 
¶5. (C) The GOAJ Ministry of Energy and Industry hosted a 
November 13 afternoon Ministerial level meeting during which 
a draft Final Summit Declaration was handed out and 
discussed.  After two hours of inconclusive debate during 
which some participants were holding out for explicit mention 
of their respective countries' favored projects while others 
sought to keep the declaration at a more general level, the 
meeting was suspended until eleven PM that same day.  During 
the follow-on meeting, which lasted until the early morning 
hours of the following day, a key compromise to the question 
of naming projects was introduced by DAS Bryza and 
subsequently worked on by SOCAR Vice-President Elshad 
Nassirov in conjunction with the Greek and Italian 
delegations. This proposed change explicity mentioned ITGI 
and Nabucco, but shunned a fuller list of specific projects 
in favor of the phrase "gas transit projects, including those 
across the territories of Georgia and Turkey, including TGI, 
Nabucco, and others." Only Kazakhstan and Turkmenistan did 
not accede to the Final Declaration. 
 
NOVEMBER 14 SUMMIT 
------------------ 
 
¶6. (C) The November 14 Summit, held at Gulustan Palace, 
consisted entirely of speeches by the participating Heads of 
Delegation (upcoming septel). All participants' speeches 
focused on mutual interdependency and the consequent need for 
energy cooperation.  Highlights included President Aliyev's 
opening remarks, which focused on Azerbaijan's efforts to 
create broader regional cooperation on energy, and on 
Azerbaijan's ability to become a gas exporter to Europe. 
Georgian President Saaskashvili's remarks were a blunt 
denunciation of Russia's recent aggressions in his country. 
Turkish President Gul said that the Southern Corridor "was at 
the top" of Turkey's agenda, and specifically mentioned the 
Nabucco and ITGI projects.  Concerning Nabucco, Gul said that 
its success "depended on gas supply...in this respect we are 
in close contact with Azerbaijan and Turkmenistan." 
 
¶7. (C) In a private discussion following with SE Gray, 
President Gul said that Turkey sought to work with Azerbaijan 
to implement its Southern Corridor strategy.  However, it had 
to do so "quietly, without bragging" in order not to 
aggrevate its relations with Russia, who was putting 
"tremendous pressure" on Turkey.  Gul expressed similar 
sentiments in his meeting with Energy Secretary Bodman 
(septel). 
 
NEW AGREEMENTS 
-------------- 
 
¶8. (C) Azerbaijan used the Summit to launch two major new 
agreements.  The first an oil transportation agreement 
between SOCAR and KMG, in order to handle the expected Kazakh 
volumes from Kashagan (septel).  The second agreement was a 
multi-year gas supply agreement between SOCAR and Georgia, 
Georgia's first multi-year gas supply contract since its 
independence.  In a November 15 meeting with Ambassador 
Derse, Georgian Energy Minister Kheteguri expressed his 
government's satisfaction with this agreement,which obviated 
the annual winter exercise of scrambling to find sufficient 
gas supplies (septel). 
 
MEDIA COVERAGE 
-------------- 
 
¶9. (C) Although not a major story in international press, in 
Azerbaijan both pro-government and opposition media gave 
broad coverage to the Summit, but with decidedly different 
approaches.  All national TV and pro-government newspapers 
highlighted Azerbaijan's leadership in support of energy 
security cooperation, without any mention of Russia or 
disagreements over the Summit Declaration.  Opposition papers 
however highlighted the Summit as "Russia's Enemies Meetin in 
Baku," and took pains to outline divisions over the 
Declaration text. 
 
¶10. (C) COMMENT:  President Aliyev is to be commended for his 
initiatve in expanding the purview of the Summit to encompass 
Southern Corridor issues, beyond the traditional tentpole of 
the Odessa-Brody pipeline, which most knowledgeable 
Azerbaijan participants see as unrealistic in the short-term. 
In this regard he is also to be commended for his courage in 
hosting a summit that was noticeable by its promulgation of 
energy principles and projects that cannot fail to anger its 
Russian neighbor.  While it isn't yet clear whether his 
recent discussions with GOT President Gul will help remove 
the barriers blocking Azerbaijan export of its Shah Deniz 
Phase Two gas to Europe, at a minimum his efforts in this 
regard seem to have given momentum to a process that has been 
esssentially stalled for over a year.  Similarly, the 
announcement of a multi-year gas supply contract with Georgia 
and an oil transportation agreement with Kazakhstan show that 
President Aliyev and Azerbaijan continue to work diligently 
on an Eurasian Energy Strategy that is in remarkable alliance 
with ours.  END COMMENT. 
 
 
APPENDIX: SUMMIT ATTENDEES 
 
Azerbaijan ) President Ilham Aliyev 
Turkey ) President Abdullah Gul 
Georgia ) President Mikhail Saakashvili 
Ukraine ) President Victor Yuschenko 
Lithuania ) President Valdas Adamkus 
Poland ) President Lech Kachinsky 
Romania ) Foreign Minister Comenescu 
Bulgaria ) Vice-President Angel Marin 
Hungary ) Prime Minister Ferenc Gyurcsany 
Estonia ) Prime Minister Andrus Ansipi 
Kazakhstan ) Minister of Energy and Natural Resources Sauat 
Minbayev 
Romania ) Foreign Affairs Minister Lazar Komenesku 
Greece ) Development Minister Christos Folias 
Italy ) Deputy Foreign Affairs Minister Alfredo Mantika 
Turkmenistan ) Deputy Foreign Affairs Minister Khoshgeldi 
Babayev 
Latvia ) Vice-Minister of Economy Bergholz 
Switzerland - Ambassador to Azerbaijan Alain Guidetti 
US ) Energy Secretary Samuel Bodman 
DERSE