VZCZCXRO4075
RR RUEHRG
DE RUEHBR #1543/01 3371538
ZNY CCCCC ZZH
R 021538Z DEC 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 3005
INFO RUEHRG/AMCONSUL RECIFE 8763
RUEHRI/AMCONSUL RIO DE JANEIRO 6940
RUEHSO/AMCONSUL SAO PAULO 3137
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 BRASILIA 001543 
 
SIPDIS 
 
DEPARTMENT FOR WHA AND NEA 
 
E.O. 12958: DECL: 11/26/2018 
TAGS: PREL BR IR
SUBJECT: BRAZILIAN FOREIGN MINISTRY CAUTIOUS ON IRAN, BUT 
STILL BUILDING TIES 
 
REF: A. STATE 119167 
     ¶B. BRASILIA 752 
 
Classified By: Ambassador Clifford M. Sobel, Reason 1.4 (b) and (d) 
 
¶1. (C) Summary: During separate meetings, both Ambassador 
Everton Vargas, Under Secretary for Political Affairs at the 
Brazilian Ministry of External Relations, and Mines and 
Energy Minister Edison Lobao, confirmed to Ambassador Sobel 
that Petrobras is not planning any further investments in 
Iran, to include the Caspian deal indicated in recent 
industry press reports (ref a).  Furthermore, Ambassador 
Vargas stated that separate news reports suggesting that 
Foreign Minister Amorim had extended an invitation to Iranian 
President Ahmadinejad to meet with President Lula were not 
accurate.  Both Vargas and Lobao noted that Brazil is under 
tremendous pressure from Iran, both to set up such a meeting 
and to increase Petrobras investment in Iran, but they said 
Brazil currently has no plans to expand the scope of the 
relationship outside of the trade area.  End Summary. 
 
- - - Petrobras Truly Out of Iran - - - 
 
¶2. (C) In a November 10 meeting with Minister of Mines and 
Energy Lobao, Ambassador Sobel inquired about industry news 
reports which suggested that Petrobras was working on a 
Caspian Sea exploration deal with Iran.  Ambassador Sobel 
noted that the head of Petrobras, Jose Sergio Gabrielli, had 
previously told him that Petrobras wells in Iran had been 
capped and there were no new Petrobras plans to engage with 
Iran.  Lobao responded that, "Gabrielli is right."  The 
Minister also noted that Iran has told the GOB they are very 
unhappy with US efforts to discourage investment and have 
asked the GOB to reconsider, but that there are no Brazilian 
plans to do so at this time. 
 
¶3. (C) In a separate meeting with Ambassador Vargas on 
November 18, Ambassador Sobel also raised the news reports of 
the Caspian deal, to which Vargas responded that they were 
absolutely not true.  He further noted that Petrobras had 
just given a presentation at Itamaraty in which Petrobras 
officials stressed that the company's number one priority was 
the pre-salt reserves off the Brazilian coast, followed by 
exploration in U.S. waters in the Gulf of Mexico.  There are 
many things that Petrobras can be accused of, Vargas said, 
"but they are not stupid."  Vargas said that the GOB is fully 
aware of Iran's status with the international community and 
the restrictions imposed by UN Security Council resolution 
and sees the dangers and risks associated with investment in 
Iran.  Even so, Vargas said, there is trade to be done 
between the two countries and Brazil is interested in 
increasing it within the bounds of UNSC sanctions.  President 
Lula in particular is very interested in the trade aspect of 
the relationship, Vargas noted, as he knows that the Iranians 
"have money to spend."  (Note: Exports to Iran account for 
about 30% of total Brazilian exports to the Middle East, or 
about US$1.8 billion, which accounts for more than 95% of 
trade volume between the two countries. End note.) 
 
- - - Amorim in Tehran; No Presidential Meeting in the 
Works--Yet - - - 
 
¶4. (C) During the meeting with Vargas, Ambassador Sobel also 
raised news reports of Amorim's recent trip to Tehran, the 
first such visit for a Brazilian foreign minister in 17 
years.  According to news reports, Amorim -- accompanied by a 
delegation of Brazilian business leaders in the areas of oil, 
agriculture, and automobiles -- visited Tehran for several 
days starting on November 1, during which he met with 
President Ahmadinejad and discussed Iran's "peaceful" nuclear 
energy program, the global financial crisis, trade, and other 
bilateral issues.  Asked if news reports that Amorim 
presented Ahmadinejad with an invitation for a 
presidential-level meeting between the Iranian president and 
Lula, Vargas  responded that no formal invitation was made. 
 
¶5. (C) Asking not to be quoted, Vargas stressed that the 
Iranians have put great pressure on Brazil to issue an 
invitation to Ahmadinejad, but Itamaraty has continually come 
up with excuses to avoid it.  Amorim had postponed his trip 
to Tehran three times, he added.  Finally, Vargas said that 
Brazil had insisted that any invitation for an Ahmadinejad 
visit must be preceded by a visit from Iran's foreign 
minister "exclusively" to Brazil, as Amorim had done in going 
to Iran. 
 
 
BRASILIA 00001543  002 OF 002 
 
 
¶6. (C) Vargas ended by asserting that Brazil is clear about 
its obligations under UNSC resolutions, and that Brazil will 
strictly adhere to whatever boundaries are imposed by the 
UNSC resolutions.  He recalled that Brazil had forced the 
Defense Ministry to shut down the Iran booth at the Latin 
America Air and Defense Show in Rio in 2007 (ref b), and said 
that they had already made clear to the MOD that they could 
not issue an invitation to Iran for the upcoming show. 
 
- - - Comment - - - 
 
¶7. (C) These recent discussions suggest a greater sense of 
caution on the part of Brazilian officials regarding Brazil's 
dealings with Iran than in the past.  This comes in the wake 
of increased dialogue with the GOB during the past year by 
Emboffs and senior USG officials-- Secretary Rice, U/S Burns, 
A/S Shannon and A/S Welch, S/P Dr. Gordon, among 
others--concerning Iran.  However, reporting in other 
channels suggests that Amorim was more forward-leaning 
regarding a visit by Ahmadinejad than Vargas indicated.  The 
GOB has made clear that it intends to cultivate commercial 
and other ties to the extent that UNSC sanctions allow, and 
we believe a presidential-level meeting between Ahmadinejad 
and Lula remains likely.  At present, the GOB is trying to 
assuage our concerns as it proceeds cautiously to strengthen 
its ties with Iran.  We will need to intensify our dialogue 
on Iran if we hope to sway the GOB that this is not the 
moment for increased engagement with Tehran.  End comment. 
SOBEL