VZCZCXYZ0022
OO RUEHWEB

DE RUEHSP #0468/01 3291831
ZNR UUUUU ZZH
O R 251826Z NOV 09
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0040
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHSP/AMEMBASSY PORT OF SPAIN

UNCLAS PORT OF SPAIN 000468 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV KIDE ECON EPET PGOV TRGY BTIO TD
SUBJECT: WGTL SETTLEMENT DEADLINE MAY PASS WITHOUT GOTT ACTION 
 
REF: PORT OF SPAIN 430; PORT OF SPAIN 401 
LETTER FROM WGTL TO CHARGE 11-06-2009 (ATTACHED) 
OFFER LETTER FROM WGTL 11-02-2009 (ATTACHED) 
 
BUSINESS SENSTIVE INFORMATION: PLEASE PROTECT ACCORDINGLY 
 
 
 
¶1.        (SBU)  SUMMARY:  World GTL's (WGTL) dispute with Trinidad 
and Tobago's national oil company Petrotrin (reftels) is reaching a 
watershed moment as its offer for settlement expires December 3. 
The Minister of Trade told Charge that the GOTT considers the 
dispute a commercial matter, and Petrotrin's president told us 
November 25 that the company's lawyers are reviewing the offer and 
threatened law suit (refs C,D), but we expect no action will be 
taken by Petrotrin or the GOTT prior to the settlement deadline. 
WGTL's president has repeatedly told us he fears that a lawsuit 
will drag on for years, and has asked if the USG regards the 
dispute as a purely commercial matter or one of expropriation, as 
the company asserts.  We continue to urge Petrotrin and the GOTT to 
settle the dispute without a lawsuit or arbitration, but the 
national oil company remains confident that its actions were 
appropriate, and does not seem to feel pressured by WGTL's 
deadline.  The Prime Minister, meanwhile, categorically told an 
international audience attending a business forum associated with 
the Commonwealth Heads of Government Meeting (CHOGM) November 24 
that his government does not expropriate property.  END SUMMARY. 
 
 
 
DECEMBER 3 SETTLEMENT DEADLINE LOOMS 
 
 
 
¶2.       (SBU)  Attorneys for US-based energy processing firm World 
GTL (WGTL) sent a settlement offer (ref D) to the Attorney General 
of Trinidad and Tobago and to Petrotrin's legal advisor on November 
2, seeking $50 million to settle the dispute.  The offer letter 
stated that, unless a cash settlement is reached beforehand, WGTL 
will file on December 3 either a lawsuit in the U.S. federal 
District Court for the Southern District of New York or an 
arbitration demand before the International Center for Settlement 
of Investment Disputes (ICSID).  WGTL's attorneys included a draft 
of the lawsuit that claims, among other things, expropriation, 
fraud and negligent misrepresentation in the way Petrotrin assumed 
a private loan on the WGTL-Petrotrin joint venture in a 
gas-to-liquids (GTL) plant for which the venture defaulted, 
forcing it into receivership and giving Petrotrin an opportunity to 
take control of the venture's management (refs A, B).  WGTL's 
president David Loring has told us several times that while he 
fears Petrotrin and the GOTT would try to drag out a lawsuit for 
many years, he also feels that they would not act on his company's 
claims without the threat of a specific legal action. 
 
 
 
YOUR DEADLINE IS NOT MY DEADLINE 
 
 
 
¶3.       (SBU)  Petrotrin's president Kenneth Allum told us 
November 25 that the company's legal team is reviewing the offer 
and lawsuit, and would advise him of a recommended course of 
action.  He added that "our doors are always open," reiterating his 
assertion that Petrotrin has been forthcoming with WGTL regarding 
the transactions that led to WGTL's current complaint, but that 
Loring and other WGTL representatives refused to communicate with 
Petrotrin officials after the venture went into receivership (ref 
A).  Allum told us that it was "unlikely" that his legal advisors 
would provide him a recommendation by WGTL's December 3 deadline. 
"Remember," he said, "we don't see this the same way Mr. Loring 
does." 
 
 
 
¶4.       (SBU)  We again urged Allum to consider the settlement as 
a better alternative to a lawsuit.  We told him that more than one 
US Senator was following the case, which may create an impetus for 
the USG to decide whether to define this matter as an 
expropriation.  We noted that, during a speech November 24 at a 
business forum associated with the Commonwealth Heads of Government 
Meeting (CHOGM) taking place in Port of Spain this week, Prime 
Minister Manning declared Trinidad and Tobago open for business 
with foreign investors, and announced new tax incentives for 
investment here.  We argued that a pending lawsuit filed by an 
investor in new technologies would be incongruous with the Prime 
Minister's message, particularly a lawsuit based on a claim of 
 
expropriation.  Allum immediately pointed to another part of 
Manning's speech in which the PM said, "We have adopted the British 
system of jurisprudence which means that we do not expropriate 
people's property nor do we expropriate the property of our local 
business people." 
 
 
 
GOTT:  THIS IS A COMMERCIAL MATTER 
 
 
 
¶5.       (SBU)  Pursuant to discussions we had with WGTL's 
president David Loring, the Charge directly forwarded copies of 
WGTL's settlement offer to the Ministers of Foreign Affairs and 
Trade, and was made aware that Trade Minister Mariano Browne (who 
is also Minister of State for Finance and a confidant of the PM) 
forwarded the same to the Minister of Energy.  Browne told the 
Charge that he considered the dispute a commercial matter, 
suggesting it would not warrant political action by the government. 
For his part, Loring has expressed his gratitude for the advocacy 
efforts undertaken on behalf of his company (ref C), but has also 
asked us if the USG considers the events leading to the venture's 
receivership as an expropriation or a purely commercial matter over 
which his company should file suit. 
 
 
 
COMMENT:  ACTION UNLIKELY 
 
 
 
¶6.       (SBU)  COMMENT:  It is unlikely that Petrotrin and/or the 
GOTT will take any action regarding the WGTL dispute and settlement 
offer in time for WGTL's December deadline.  Allum's awareness of 
the deadline and his assertion that his legal team is reviewing the 
matter, however, offer some encouragement, since much of his 
attention since November 2 most certainly would have been split 
between CHOGM events, union calls for work stoppages against his 
company, and follow up to reports he made public that the company 
is facing budget shortfalls.  We do not know if Manning's reference 
to expropriation in his November 24 speech was in any way related 
to the WGTL dispute, but Allum appeared to take stock of the PM's 
assertion, telling us "I don't think I need to say much more on 
that topic."  Petrotrin, as we have reported, is confident that it 
acted appropriately to save a faltering project that had been 
mismanaged by WGTL (ref A).  Unless otherwise directed by the 
Department, we will refrain from offering a view on the 
expropriation/commercial dispute question and will continue to urge 
Petrotrin and the GOTT to be flexible in their approach to the 
matter and to reach a settlement.  Given the current state of play, 
though, litigation seems inevitable. 
 
 
 
¶7.       (U)  Refs C and D  are attached to this cable in SMART 
format. 
KUSNITZ