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DE RUEHCV #0237 0572045
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R 262045Z FEB 10
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 0532
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L CARACAS 000237 
 
SIPDIS 
ENERGY FOR CDAY AND ALOCKWOOD 
HQ SOUTHCOM ALSO FOR POLAD 
TREASURY FOR MKACZMAREK 
NSC FOR DRESTREPO AND LROSSELLO 
USDOC FOR 4332 MAC/ITA/WH/JLAO 
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE 
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC 
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA 
 
E.O. 12958: DECL: 2020/02/26 
TAGS: ENRG ECON VE
SUBJECT: GE TURBINE SALES TO VENEZUELA 
 
CLASSIFIED BY: DUDDY, AMBASSADOR, DOS, AMB; REASON: 1.4(B), (D) 
 
¶1.  (C) Following President Chavez's comments the night of February 
19 that energy issues were not ideological and that his 
Administration has signed agreements with General Electric, Post 
reached out to the company to discuss its current activities in 
Venezuela.  On February 24, Emboffs spoke by conference call with 
GE National Executive Northern South America President Fabiola 
Sojet as well as Venezuela-based executive Roberto Chacin (protect 
throughout). 
 
¶2. (C) According to Chacin, between June 2008 and December 2009, 
1,200 MW of GE turbines were purchased for use in Venezuela from 
what he characterized as the "secondary market" in the United 
States.  Chacin emphasized that the company's normal business model 
is the sale of turbines as part of projects proposed and bid by 
international engineering firms.  With the economic downturn in the 
U.S., however, a number of U.S. businesses found that they had 
turbines for which they had no need.   These businesses recovered 
their investments by selling the turbines into the Venezuelan and 
other markets. 
 
¶3. (C) Chacin noted that the GBRV has been aggressively pursuing 
electrical sector projects with a range of engineering companies 
from Portugal, France, Spain and the U.S.   More than 3,000 MW of 
GE turbines have been included in project proposals now under 
consideration by the government of the Bolivaran Republic of 
Venezuela (GBRV).  Chacin underlined that Siemens and Pratt & 
Whitney turbines are also potentially part of projects under 
consideration by the government.   Chacin quickly rattled off a 
list of major projects already in execution and those proposed, 
noting that the GBRV has plans to install enough thermal power to 
match Venezuela's 14,000 MW of hydroelectric power within 5-6 
years.  Emboff will meet March 5 with Sojet and Chacin to discuss 
the project list.  Sojet and Chacin confirmed Venezuelan press 
reports from February 23 that CITGO had given guarantees for the 
purchase of four turbines.  Two of these were purchased from a 
Florida company, i.e., the secondary market, while two new machines 
from GE's 2010 production line were purchased directly from the 
company. 
 
¶4. (C) Turning to the issue of Venezuela's national electrical 
crisis, Chacin noted that it has started to rain in the basin which 
feeds into the critical Guri reservoir.  (NOTE:  We have not yet 
observed any evidence of rainfall in the reservoir statistics 
published by the GBRV.  END NOTE)  Chacin believes that the country 
will "get by" in 2010 but that there is the potential for a more 
serious crisis in January-February 2011 when Guri reservoir levels 
will fall following the end of the rainy season.  Reservoir levels 
are so low, he said, that one year's rain will not be enough. 
Three years will be needed to fully recover reservoir levels. 
DUDDY