TelegramUNCLASSIFIED   TRIPOLI   00000139 
VZCZCXRO2854
PP RUEHTRO
DE RUEHTRO #0139 0431825
ZNR UUUUU ZZH
P 121825Z FEB 09
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 4479
INFO RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHTRO/AMEMBASSY TRIPOLI 5004

UNCLAS TRIPOLI 000139 
 
DEPT FOR NEA, L AND EB 
 
E.O. 12958: N/A 
TAGS: PREL ENRG ETRD LY
SUBJECT: GHANEM "UNDER THE GUN" TO COLLECT CONTRIBUTIONS FOR CLAIMS 
COMPENSATION FUND 
 
¶1. (C) Summary:  During a February 10 introductory meeting with 
the Ambassador, the chairman of Libya's National Oil Company, 
Dr. Shukri Ghanem, said Libya was unlikely to nationalize its 
oil industry and that Muammar al-Qadhafi's public comments were 
an expression of the Leader's frustration that foreign companies 
had not yet contributed to the international fund established 
under the U.S.-Libya Claims Compensation Agreement signed in 
August.  The Ambassador said U.S. companies had reported feeling 
pressured to contribute to the fund, which if true was contrary 
to the understanding between the two governments that any 
contributions from U.S. firms would be strictly voluntary. 
Ghanem took the point but said he was under pressure to recover 
$700 million the NOC had "lent" the fund in October, and hoped 
that the U.S. would encourage companies to find a creative way 
to help.  End summary. 
 
 ¶2. (C) Ghanem welcomed the Ambassador to Libya, saying he was 
pleased that normal relations had been restored.  He recounted 
"better times" when there was a large American community 
resident in Tripoli, and Americans lived and worked "side by 
side" with Libyans.  Many Libyans, including himself, had 
studied in the United States (Ghanem has a Phd from the Fletcher 
School at Tufts University).  Ghanem compared the current state 
of U.S.-Libyan relations to a married couple who had been 
divorced for 25 years and then remarried:  "It's not easy.  We 
are watching each other very carefully, analyzing everything the 
other one says."  After a discussion of the situation in Gaza 
during which Ghanem and his staff argued the merits of 
al-Qadhafi's proposal for a one-state solution, the Ambassador 
asked about the Leader's recent public statements suggesting 
that Libya might nationalize its oil sector. 
 
¶3. (C) Ghanem dismissed the possibility of nationalization as 
unlikely, saying "We are not taking any action and are 
continuing business as usual."  The Leader's comments were a 
sign of his "frustration" that foreign companies had not yet 
contributed to the international fund established under the 
U.S.-Libya Claims Compensation Agreement signed in August. 
Reviewing the  negotiating history, Ghanem said that once the 
U.S. government made it clear that the USG would not pay into 
the $1.8 billion fund, the GOL adopted the same position.  The 
solution was for the GOL to solicit contributions from "friendly 
countries and companies."  While some foreign governments had 
helped, so far no private companies had contributed.  This had 
led the leadership to conclude that the companies were merely 
exploiting Libya's resources.  As a result, the NOC was under 
increasing pressure from the leadership to recover the funds it 
had "loaned" to enable the agreement to be implemented last 
October.  That was why the Prime Minister had summoned 
international oil companies earlier in the month and pressed 
them to respond to the NOC's letters soliciting contributions. 
Ghanem said that the current amount of the funding "gap" was 
$700 million; the NOC had suggested that U.S. companies 
(presumably he was referring to the oil producers, vice the 
service companies and companies that are only exploring) 
contribute $180 million, based on their level of production. 
The amounts were relatively small for companies that stood to 
make large profits from producing oil and gas in Libya, he said. 
 He predicted that "some" foreign companies would eventually 
make a contribution.  (Comment: We have heard from contacts in 
the IOCs that Gazprom would make a payment.  End comment.) 
 
¶4. (C) The Ambassador reminded Ghanem that putting pressure on 
U.S. companies "crossed a red-line" and was contrary to the 
understanding between the U.S. and Libya.  The PM's February 28 
"deadline" for companies to respond "sent a troubling signal" in 
that it suggests that their business could suffer if they fail 
to contribute to the fund.  Ghanem acknowledged the point 
(without addressing whether there would be any negative 
consequences after the deadline had passed) but said he needed 
to find a solution and was open to other ideas, such as 
re-labeling the fund if that would make it more palatable for 
U.S. companies.  He asked that the U.S. at least refrain from 
instructing U.S. companies not to contribute.  The Ambassador 
replied he was in no position to do that, reiterated again the 
U.S. position of no pressure, and urged Ghanem and his 
colleagues in the GOL to consider the long-term relationship 
with the United States. 
 
¶5. (C) Comment:  Ghanem fully understands the U.S. red-line and 
will no doubt pass the message to the political leadership, if 
only to help relieve some of the pressure he is getting from 
above. At the same time, it is clear that the Libyans, sensing a 
dead-end in soliciting contributions pegged to the fund, are now 
actively seeking other creative ways to package the 
solicitation.   The one-two punch of threatening nationalization 
while summoning the IOCs and giving them a deadline might lead 
to payments from some foreign companies.  The American IOCs with 
whom we are in contact continue to tell us they intend to hold 
the line, and are looking for USG support. 
 
CRETZ