VZCZCXYZ0000
RR RUEHWEB

DE RUEHSP #0480/01 3382059
ZNR UUUUU ZZH
R 042055Z DEC 09
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC 0060
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHSP/AMEMBASSY PORT OF SPAIN

UNCLAS PORT OF SPAIN 000480 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV KIDE ECON EPET PGOV TRGY BTIO TD
SUBJECT: PETROTRIN REJECTS DEMAND TO SETTLE WGTL DISPUTE 
 
REF: PORT OF SPAIN 468; PORT OF SPAIN 430; PORT OF SPAIN 401 
 
BUSINESS SENSITIVE INFORMATION; PLEASE PROTECT ACCORDINGLY 
 
 
 
 
 
¶1. (SBU) SUMMARY.  Lawyers for Trinidad and Tobago's state-owned 
oil company Petrotrin sent a letter dated December 2 to attorneys 
representing US-based World GTL (WGTL) rejecting that firm's claims 
that Petrotrin expropriated its property and fraudulently and 
negligently deprived WGTL of its investments and future earnings in 
a joint-venture gas-to-liquids (GTL) plant (reftels).  In the 
letter, the firm Allen and Overy stated it represented both 
Petrotrin and the GOTT, and that its clients rejected WGTL's demand 
for an immediate $50 million settlement.  The letter states 
Petrotrin and the GOTT are prepared to contest WGTL's claims should 
WGTL carry through with a threatened lawsuit in New York federal 
court, but added that they remain willing to consider any proposals 
to settle the dispute.  Charge discussed the matter with the Prime 
Minister's Permanent Secretary December 2 before we received news 
of the letter, and WGTL's president told us later that day that he 
fears a lawsuit would drag on for years.  END SUMMARY. 
 
 
 
GOTT/PETROTRIN REFUSE SETTLEMENT OFFER 
 
-------------------------------------- 
 
 
 
¶2. (SBU) The New York office of the law firm Allen and Overy, 
acting on behalf of the Republic of Trinidad and Tobago (TT) and 
its parastatal oil company Petrotrin, sent a letter to attorneys 
for the US-based fuel processing company World GTL (WGTL) rejecting 
WGTL's previous demand for $50 million to settle a dispute over a 
gas-to-liquids (GTL) joint-venture in Trinidad and Tobago 
(reftels).  Petrotrin's lawyers stated that claims made by WGTL in 
a demand for settlement sent to Petrotrin and TT's attorney general 
November 2 were "devoid of merit," and that Petrotrin and the 
Republic "reject them in their entirety." 
 
 
 
¶3. (SBU) In the letter, Petrotrin also countered WGTL's claims by 
asserting the U.S. company disregarded its contractual obligations 
to the joint-venture, refused to fund the project as agreed to in 
writing, and failed to develop the facility in a timely manner. 
The letter further asserts that Petrotrin's actions were taken to 
preserve and complete the project and to secure its viability, and 
were "justified by the express terms of the transaction...and fully 
consistent with applicable law."  It also claims that WGTL 
"routinely" rejected prior Petrotrin proposals to reach a 
settlement and terminated discussions without explanation. 
 
 
 
STILL ROOM TO NEGOTIATE? 
 
------------------------ 
 
 
 
¶4. (SBU) WGTL's president and CEO David Loring, who gave us a copy 
of the December 2 letter, said he fears Petrotrin is digging in for 
a court battle that could last years.  WGTL's attorney's forwarded 
a draft complaint November 2 to Petrotrin and TT's attorney general 
along with a demand for $50 million to settle the dispute.  The 
complaint, to be filed in New York federal court, alleges, among 
other things, that Petrotrin and the GOTT expropriated WGTL 
property, and fraudulently and negligently deprived WGTL of its 
investments and future earnings associated with the GTL plant. 
 
 
 
¶5. (SBU) In the December 2 letter, Petrotrin's lawyers stated that 
its clients "are prepared to contest World GTL's claims on the 
merits."  The letter also states, however, that "Petrotrin is 
willing, as it has been from the outset, to listen to any rational 
proposals" that WGTL would put forward "as a possible way to settle 
any commercial disputes between the parties."  WGTL's Loring has 
not told us whether his company would consider any other proposals 
at this point in time, but he did contact us on November 27 to help 
ascertain a point of contact at Petrotrin to discuss the 
 
possibility of mediation.  We reached out to Petrotrin's president, 
who told us that, because his company had received the November 2 
demand letter and draft complaint from WGTL's lawyers Thompson and 
Knight, he preferred any communications regarding settlement 
options to be made through WGTL's attorneys, which we relayed to 
Loring. 
 
 
 
EMBASSY ACTIONS TO DATE 
 
----------------------- 
 
 
 
¶6. (SBU) Since mid-September, the Embassy has taken the following 
advocacy steps on behalf of WGTL in its dispute with Petrotrin and 
the GOTT: 
 
 
 
-- Communications with WGTL.  PolEcon Chief and Econ/Commercial 
Officer communicate regularly with WGTL's president by email and 
telephone to discuss the facts of the dispute and to relay 
information we learn from the GOTT and other sources. 
 
 
 
-- Advocacy at Petrotrin.  PolEcon Chief and Econ/Comm Officer have 
discussed the matter with Petrotrin's president to ascertain his 
perspectives and to urge settlement.  Communications have been via 
telephone, email and a meeting at his office with several other 
Petrotrin executives. 
 
 
 
-- Political Advocacy.  Charge has discussed the matter on several 
occasions with the Minister of Foreign Affairs and the Minister of 
Trade (who is also a Minister of State for Finance), urging the 
GOTT to approach the matter with a degree of flexibility and urging 
consideration of a settlement.  Furthermore, Charge, after 
consultation with WGTL's president, forwarded a copy of WGTL's 
demand letter to both ministers, after which the Minister of Trade 
copied the Minister of Energy in his reply to the Charge.  PolEcon 
Chief delivered the same message to the permanent secretaries at 
the energy and trade ministries. 
 
 
 
-- Prime Minister's Office.  Charge again urged flexibility on the 
matter to Sandra Marchak, the Prime Minister's Permanent Secretary, 
in a meeting December 2. 
 
 
 
¶7. (SBU) COMMENT.  All indications are that Petrotrin is very 
comfortable with its position regarding this dispute, and the GOTT 
representatives with whom we have spoken have expressed confidence 
in Petrotrin's handling of the matter.  The fact that Allen and 
Overy stated that "the Republic" asked the firm to respond on its 
behalf in addition to Petrotrin suggests that the GOTT is well 
aware of the matter.  The Prime Minister's PermSec gave away little 
in that regard, but when the Charge asked if Manning's affirmation 
in a speech November 24 that TT does not engage in expropriation 
(ref A) was in reference to the WGTL dispute, Marchak laughed and 
exclaimed, "Maybe!"  Regardless of whether Petrotrin is sincere in 
its repeated assertions that it is willing to consider "reasonable" 
offers to settle this matter, both it and the GOTT seem to firmly 
consider the ball to be back in WGTL's court, either to file suit, 
or to propose a new alternative. 
KUSNITZ