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Reference ID Subject Created Released Classification Origin
06TOKYO5805 JAPANESE IPR OFFICIALS POSITIVE ON ""GOLD STANDARD"" AGREEMENT; STILL NOT SUPPORTING WTO CASE AGAINST CHINA REF: A) TOKYO 3873 B) TOKYO 4025 TOKYO 00005805 001.2 OF 004 Classified By: CLASSIFIED BY CDA JOSEPH DONOVAN FOR REASONS: 1.4 b, d 2006-10-05 2011-02-03 CONFIDENTIAL Embassy Tokyo
08ROME1337 BERLUSCONI GOVERNMENT AND IPR -- FIRST SIGNS OF LIFE 2008-11-05 2011-02-03 CONFIDENTIAL Embassy Rome
05SANAA1589 GOOD NEWS FOR YEMEN'S INVESTMENT CLIMATE: DUBAI 2005-06-14 2011-02-03 CONFIDENTIAL Embassy Sanaa
09CAIRO814 NATIONAL COUNCIL FOR HUMAN RIGHTS REPORT 2009-05-13 2011-02-03 CONFIDENTIAL Embassy Cairo
10CAIRO47 SCENESETTER FOR A/S POSNER'S JANUARY 12-15 2010-01-06 2011-02-03 CONFIDENTIAL Embassy Cairo
10SOFIA31 BULGARIA ENHANCES END-USE MONITORING MECHANISMS 2010-01-15 2011-02-03 CONFIDENTIAL Embassy Sofia
10SANAA222 IN ADEN, NEWSPAPER HEADQUARTERS STILL BLACKENED 2010-02-03 2011-02-03 CONFIDENTIAL Embassy Sanaa
06MADRID621 AMBASSADOR SHIRIN TAHIR-KHELI'S VISIT TO SPAIN 2006-03-14 2011-02-02 CONFIDENTIAL Embassy Madrid
06STATE40904 DISCOURAGING MORATINOS' SYRIAN STRATEGY 2006-03-14 2011-02-02 CONFIDENTIAL Secretary of State
06PARIS1699 FRENCH ON PM DE VILLEPIN'S MARCH 13 WORKING VISIT 2006-03-16 2011-02-02 CONFIDENTIAL Embassy Paris
06MADRID779 SPAIN: AMBASSADOR,S MEETING WITH FM MORATINOS 2006-03-31 2011-02-02 CONFIDENTIAL Embassy Madrid
07MADRID1021 SCENESETTER FOR SECRETARY RICE'S JUNE 1 VISIT TO 2007-05-25 2011-02-02 CONFIDENTIAL Embassy Madrid
08MADRID1132 NEA A/S WELCH MEETINGS WITH SPANISH OFFICIALS 2008-10-31 2011-02-02 CONFIDENTIAL Embassy Madrid
07BRUSSELS3423 IRAN DESIGNATIONS: EU NEEDS GREATER SENSE OF URGENCY REF: A. SECSTATE 160808 B. BRUSSELS 3137 2007-11-29 2011-02-02 CONFIDENTIAL USEU Brussels
08LONDON630 IRAN NUCLEAR: UK COMMONS REPORT WILL CALL FOR DROPPING SUSPENSION; FCO DISCOUNTS REPORT'S IMPACT REF: A. LONDON 4204 B. EMBASSY DAILY OF JANUARY 31 C. 2008 D. GAYLE-NEA/IR FEBRUARY 29 E-MAIL 2008-02-29 2011-02-02 CONFIDENTIAL Embassy London
08BEIJING2087 SCENESETTER FOR JUNE 4 SECURITY DIALOGUE 2008-05-29 2011-02-02 CONFIDENTIAL Embassy Beijing
09OTTAWA639 CANADA IMPOSES 45-DAY HOLD ON FORSYS URANIUM SALE REF: A. OTTAWA 627 B. STATE 84119 2009-08-19 2011-02-02 CONFIDENTIAL Embassy Ottawa
04THEHAGUE281 2004-02-04 2011-02-02 CONFIDENTIAL Embassy The Hague
06THEHAGUE210 NETHERLANDS/ISAF: TURNING THE CORNER 2006-01-31 2011-02-02 CONFIDENTIAL Embassy The Hague
06THEHAGUE2639 NETHERLANDS: STILL STRUGGLING WITH SREBRENICA 2006-12-19 2011-02-02 CONFIDENTIAL Embassy The Hague
09BRUSSELS854 JUNE GAERC - GUANTANAMO, IRELAND, THE MIDDLE EAST, 2009-06-19 2011-02-02 CONFIDENTIAL USEU Brussels
07BRATISLAVA630 NUCLEAR SMUGGLING INCIDENT AT PRIBENIK, SLOVAKIA REF: 06 STATE 163201 Classified By: Lawrence R. Silverman, Deputy Chief of Mission, for reason 1.4 (b) and (d) 2007-11-29 2011-02-01 CONFIDENTIAL Embassy Bratislava
07TOKYO5492 2007-12-07 2011-02-01 CONFIDENTIAL Embassy Tokyo
08CANBERRA198 AUSTRALIA GROUP: PLENARY INFORMATION EXCHANGE AND 2008-02-27 2011-02-01 CONFIDENTIAL Embassy Canberra
08ROME274 AUSTRALIA GROUP: ITALIAN PARTICIPATION IN PLENARY 2008-03-05 2011-02-01 CONFIDENTIAL Embassy Rome
08UNVIEVIENNA215 IAEA: HAYWARD DELEGATION TOUR D,HORIZON WITH SENIOR AGENCY OFFICIALS Classified By: Ambassador Gregory L. Schulte for reasons 1.4 b,d and h Summary -------- 2008-04-16 2011-02-01 CONFIDENTIAL UNVIE
08TRIPOLI375 QADHAFI DEVELOPMENT FOUNDATION: FATHI EL-JAHMI HAS RETURNED TO HIS HOME 2008-05-08 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI382 DEATH OF KEY LIBYAN OFFICIAL HAMPERS COUNTER-MIGRATION EFFORTS REF: TRIPOLI 0050 TRIPOLI 00000382 001.4 OF 002 2008-05-12 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI401 FATHI EL-JAHMI REMAINS IN HOSPITAL, DESPITE REPORTS OF HIS RELEASE REF: A) JOHNSON-STEVENS EMAIL 05/12/2008, B) TRIPOLI 375, C) TRIPOLI 229, D) TRIPOLI 280 2008-05-15 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI402 POLITICAL-ECONOMIC REFORM, JAMAHIRIYA-STYLE 2008-05-16 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI411 EMBASSY DENIED ACCESS TO DETAINED HUMAN RIGHTS ACTIVIST 2008-05-22 2011-02-01 CONFIDENTIAL Embassy Tripoli
08NEWDELHI1489 NARAYANAN URGES BETTER BILATERAL UNDERSTANDING ON 2008-06-02 2011-02-01 CONFIDENTIAL Embassy New Delhi
08TRIPOLI442 MEETING OF AMU HEADS OF STATE - MINUS ONE - IN TRIPOLI; 2008-06-09 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI453 QADHAFI AND ASAD 2008-06-11 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI457 QADHAFI WORKS TO MUSTER ARAB OPPOSITION TO SARKOZY'S 2008-06-12 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI466 CHEMICAL WEAPONS CONVENTION (CWC): CONVERSION OF THE RABTA CHEMICAL WEAPONS PRODUCTION FACILITY REF: A) STATE 58476, B) THE HAGUE 482, C) TRIPOLI 119 CLASSIFIED BY: Chris Stevens, CDA, U.S. Embassy Tripoli, Dept of State. REASON: 1.4 (b), (d) 1. (C) Summary: The GOL's lead interlocutor on CWC issues told us: 1) conversion of the Rabta chemical weapons production facility would not be completed until December 2009 (which the GOL appears to have known since early 2006), 2) the GOL would not submit a new National Paper at the upcoming June 24-27 Executive Committee meeting of the OPCW, 3) GOL Delreps would/would read an official statement into the record of the EC's informal session that would address all points stipulated in ref A non-paper; 4) the GOL was ready to facilitate a bilateral visit by U.S. technical experts at any time, and; 5) despite delays, the GOL expects to complete destruction of chemical agents well before the deadline it agreed to with States Parties. End summary. 2. (SBU) P/E Chief conveyed ref A demarche points and non-paper on June 12 to Dr. Ahmed Hesnawy, who heads Libya's CWC compliance efforts, and Adel Ben Issa, who has the lead on CWC issues in the International Organization Department of the Ministry of Foreign Affairs (MFA/IO). Dr. Fathi Asseid, Technical Director of the General Company for the Manufacture of Pharmaceuticals and Medical Supplies, which controls the Rabta facility and a related pharmaceutical packaging plant, also attended the meeting. Stressing the GOL's commitment to transparency in declaring its CWC-related equipment, implementing conversion of the Rabta facility and destroying chemical weapon precursors, Dr. Hesnawy thanked the U.S. and U.K. for their "robust" support for Libya's efforts to date. Per ref A, copies of the non-paper and an oral brief on the demarche points were conveyed to U.K. and Italian Embassy counterparts in Tripoli. CONVERSION PROJECT 3. (SBU) On the points of the demarche, Hesnawy indicated the following: - CONVERSION DELAY: Conversation of the Rabta chemical weapons production facility will not be completed before November/December 2009. The GOL signed an original contract with Italian company PharmaChem on February 11, 2002; an addendum to that contract, signed on June 1, 2006 (which Hesnawy showed P/E Chief), stipulated that PharmaChem's portion of conversion work at the Rabta facility would be completed by September 2009. The GOL, factoring in possible unexpected delays, added three months to the timeline, yielding an expected completion date of December 2009. Hesnawy did not respond when asked why Libya had not notified States Parties earlier that conversion would be delayed if it had known since February 2006 that the contract with PharmaChem stipulated a completion date in late 2009. He insisted that the GOL would complete the conversion project and initiate production of pharmaceuticals at Rabta by December 2009. - NEW NATIONAL PAPER: Libya will not submit a new National Paper to the Executive Council (EC) meeting of the OPCW scheduled to begin on June 24. Noting that National Papers are to be submitted at least a month in advance of EC's for review by States Parties, Hesnawy pointed to the fact that the meeting was just ten days away and that there was not sufficient time for review. P/E Chief noted that we had asked since early May that the GOL immediately submit a new National Paper for review. Hesnawy had no response, but said Libya's delegation will instead submit an "official statement" during the Informal Session that would address all points stipulated in ref A non-paper. The informal statement would explain "completely" the reasons for missing the July 29, 2008 conversion deadline and the need for "a correction" to the conversion plan that would eliminate the requirement that a protective sandbag berm be removed. - VISIT BY U.S. TECHNICAL EXPERTS: Hesnawy and his MFA/IO counterpart stressed that the GOL stands ready to facilitate a visit to the Rabta facility by U.S. Embassy officials and/or U.S. technical experts - the U.S. side is "welcome to visit at any time - we have nothing to hide". Such a visit could occur before the upcoming EC meeting or after it. The GOL has already extended invitations through the Italian and U.K. Embassies for their capitals to send teams of technical experts. (Note: The Italian Ambassador and DCM, but not/not Italian technical experts visited Rabta on June 7. A U.K. technical team is notionally scheduled to visit July 6-9, 2008. End note.) Hesnawy stressed that the GOL was willing to accommodate a series of bilateral visits by technical experts, but was not/not willing to facilitate a visit by a combined team (i.e., of U.S. and U.K. experts) out of concern that the visit's agenda could be broadened. TRIPOLI 00000466 002 OF 003 - NEXT STEPS: Hesnawy indicated that he clearly understood that U.S. support for a conversion plan correction to allow retention of a modified protective berm depended on a commitment to transparency and conduct of a site visit to Rabta. He said that the GOL might/might be amenable to submitting a new National Paper at the next EC after the upcoming meeting in late June, indicating that the GOL would premise its decision in part on conversations with Delreps at the June 24-27 EC meeting. IRANIAN HARASSMENT DURING APRIL 2008 OPCW INSPECTION ALLEGED 4. (C) Referring to the April visit by an OPCW inspection team, Hesnawy complained that an Iranian inspector had raised issues with equipment in Building Number 3 and Building Number 4 that had since 2004 been mutually agreed to have been exclusively commercial in nature. According to Hesnawy, four previous tranches of OPCW inspectors had been informed of the equipment and assured the GOL that the equipment did not need to be declared. Referring to the GOL's decision to vote for a UN Security Council Resolution calling for a third tranche of sanctions against Iran because of its nuclear weapons program, Hesnawy said the Iranian inspector deliberately raised the issue of equipment in the commercial building to harass Libya in retaliation for its UNSC vote. Hesnawy claimed Iranian officials at the OPCW had conceded as much in conversations at The Hague with Libya's representative, Muhammad Gheton. "Libya feels it's being dragged back to 2004", Hesnawy complained, saying previous teams of inspectors should have raised the issue of the equipment earlier if it was indeed a subject of concern. DESTRUCTION: STATUS OF ITALIAN CONTRACT & PROJECT TIMELINE 5. (C) Regarding ref B reports that the timetable for Libya's destruction program had slipped, Hesnawy conceded that there had been delays; however, he maintained that Libya would nonetheless meet the deadline of the States Parties. The GOL envisions the project in two phases: 1) Repackaging of the agent from existing polyethylene containers (which has resulted in diffusion, vice leakage, of the agent) into improved containers for the 800 km trip from the Ruwagha facility in al-Jufra to the Rabta facility; and 2) actual destruction of the material. Hesnawy said the GOL will rely on Italian company SIPSA Enginerring and Libyan civil contractors to complete the repackaging and destruction work. Contract negotiations with the Italian company had been "completed" and terms were mutually understood by the GOL and SIPSA; however, the contract itself had not yet been formally approved by "all relevant GOL entities", according to Hesnawy. Additional details, such as securing GOL approval to establish requisite bank accounts and authority for letters of credit were also still being worked out. 6. (C) Hesnawy offered the following schedule for the destruction program: - January/February 2009: Repackaging of the agent takes place; agent is stored in Bunker 109 at al-Jufra until transport to Rabta in late 2009/early 2010; - March 2009: Construction completed on destruction building at Rabta facility; - March-October 2009: Destruction equipment installed in destruction building at Rabta facility; - December 2009: Cold and hot tests of destruction equipment at Rabta destruction facility; - Early February 2010: Commissioning of destruction facility at Rabta; - May 1, 2010: 1% of agent destroyed per agreement with OPCW. Hesnawy offered that SIPSA and the GOL estimated that destruction of all of the agent would require only 25 calendar days once destruction commenced at the Rabta facility. He anticipated no difficulty meeting the deadline for destruction of the agent, and predicted that Libya would complete the project well in advance of the deadline. 7. (C) Comment: Animated and at times angry, Hesnawy repeatedly stressed the GOL's annoyance at what it perceives as an "endless" series of questions about details of its conversion and destruction plans. Stressing that dignity was more important than anything in Libya, Hesnawy offered that GOL officials had considered whether it would be better to destroy the Rabta facility altogether rather than allow it to be used as a pretext for criticism of the GOL's intentions and performance TRIPOLI 00000466 003 OF 003 by "hostile international actors". STEVENS 2008-06-15 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI480 BUSINESS IS POLITICS: MARKS & SPENCER DRAMA TIED TO FATE OF 2008-06-18 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI494 JOURNALIST JAILED FOR CRITICIZING GOVERNMENT'S 2008-06-22 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI505 NEGOTIATIONS OVER MIL-MIL MOU CONTINUE 2008-06-26 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI506 FATHI EL-JAHMI'S SON ASKS EMBASSY TO STOP VISITING HIM 2008-06-27 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI526 LIBYA SEEKS TO BLACKMAIL EUROPEAN MISSIONS FOR VISAS 2008-07-03 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI527 LIBYAN RESPONSE ON ARB-4 REVIEW PROCEEDINGS 2008-07-03 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI530 LIBYA'S BERBER MINORITY STILL OUT IN THE COLD 2008-07-03 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI540 CHEVRON MAY QUIT LIBYA 2008-07-08 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI541 EUROPEANS ENGAGE GOL ON BOUFAYED HUMAN RIGHTS CASE 2008-07-08 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI563 OXY'S 30-YEAR EXTENSION IN LIBYA AND WHAT LIES AHEAD FOR OTHER IOCS REF: A) TRIPOLI 555 B) 2007 TRIPOLI 983 TRIPOLI 00000563 001.2 OF 003 CLASSIFIED BY: John T. Godfrey, CDA, Embassy Tripoli, U.S. Dept of State. REASON: 1.4 (b), (d) 1. (C) Summary: The long-awaited ratification of Oxy's contract extension in Libya has solidified its position as one of Libya's leading oil and gas players. The process by which the contract was finalized has shed light on what lies ahead for other foreign companies, all of whom are expected to be approached soon to sign similar deals. The extensions contain considerable benefits, including higher profits, anti-corruption measures and less state company obstructionism; however, they contain lower production shares and reduced bookable reserve levels, and mandate a heavy reliance on the thinly-stretched National Oil Corporation. Given projections for steadily rising global energy costs, it remains to be seen how long the new contracts will remain in place without amendment. End Summary. 2. (C) Following the well-publicized announcement of Occidental Petroleum's (Oxy) extension in Libya (Ref A), post's Econoff and Econ/Commercial Assistant sat down with John Winterman (protect), Oxy's Country Manager for Libya, to discuss the negotiation process and contract terms, and assess the playing field for other international oil companies (IOCs) active in Libya. Winterman's experience in his current position and former tenure as Oxy's Worldwide Exploration Manager for 7 years makes him one of the most knowledgeable observers of Libya's energy sector. DONE DEAL - AT LAST 3. (C) Winterman confirmed the general contract terms outlined in press reports. Oxy and its partner OMV (Austria) signed a total of five Exploration and Production Sharing (EPSA) contracts with Libya's National Oil Corporation (NOC) on June 23. The contracts were based on terms of a "Heads of Agreement" memoranda signed between Oxy's Chairman and NOC Chairman Shukri Ghanem on November 24, 2007 (ref B). As reported in the press, Oxy paid a $1 billion signature bonus as part of the deal, and has committed to $2.5 billion (split 75/25 for Oxy/OMV) investment plan, with the NOC matching an equal amount for investment. Oxy intends to drill some 400 wells starting in 2011, requiring a minimum of 12-15 rigs working full-time. The contract extension allows them to bring in 50 additional staff, including 16 Amcits, all of whom already have their visas and residency permits. 4. (C) A two-person NOC negotiating team worked on all three agreements (Eni, Petro-Canada and Oxy). The NOC's driving force behind the negotiation process was Assam Ali Elmessallati, who bears the title Committee Member for Investment and Joint Venture Follow-Up. According to Winterman, Elmessallati stalled negotiations with Eni (the first of the three agreements that the NOC tackled), pulling a near-final agreement off the table in order to conduct further "internal reviews". According to Winterman, Elmessallati conducted "an internal socialization process" in which he circulated the agreement broadly to get as many Libyan government "fingerprints" on the deal as possible. His past role as architect of the EPSA IV process likely informed the effort, which garnered enough buy-in for the deal to move forward without the threat of last-minute opposition from parties who would have gone unconsulted absent his efforts. Winterman also noted that it was vital that these new EPSA deals be presented General People's Committee (Cabinet-equivalent) as "extensions" verses, as opposed to new deals that would have to be re-bid from scratch. NEW TERMS ARE BROADLY BENEFICIAL 5. (C) The IOCs' previous deals were based on a fixed margin, meaning that companies were somewhat insulated from fluxuations in the market price of oil by receiving a fixed price for every barrel produced. The new EPSA deals, while resulting in a lower overall production share for the IOCs, removes that fixed margin, allowing companies to reap higher profits per barrel when oil prices are high. That, together with the fact that the NOC will now cover the costs for all taxes, royalties and fees, results in the IOCs making a great deal more money per barrel of oil produced. Winterman assesses that the IOCs will get their money back (i.e. signature bonuses and investment requirements) very quickly under the new EPSA deals, as greater revenue driven by high oil prices will generate rapid reimbursement of their outlays. TRIPOLI 00000563 002.2 OF 003 6. (C) An additional element of the new terms is that the ties between the IOCs and their local Libyan operating partners (Zuetina in Oxy/OMV's case) are less direct, in two distinct ways. Development plans for existing fields are now no longer run through the Libyan operators, but have been negotiated directly with the NOC under the new agreements. This means that traditional Libyan national company resistance to new investment and technologies (i.e., the much lamented tendency to keep things "the old way") have been swept aside, paving the way (with NOC approval) for more ambitious field development that should boost Libya's national production much more quickly. (Note: The NOC claims it will increase national production from a current level of 1.75 million bbl/day to 3 million bbl/day figure by 2012-15. End note.). The new EPSA framework has a substantial new anti-corruption measure that will prevent state-run companies (infamous for skimming off the top of contracts) from being involved in the tendering process. The new tendering arrangement will be between IOC and NOC representatives only, so the state-run companies have been frozen out entirely. This new arrangement creates "Joint Project Teams" that should reduce the potential for graft, while at the same time allowing for faster work rates through a streamlined decision-making and tendering process. Finally, the EPSA agreements incorporate robust IOC-provided training programs for Libyan nationals, which should help to ensure the creation of Libya's next generation of energy sector experts. TWO SHORTCOMINGS: BOOKED RESERVES SHARE SMALLER . 7. (C) The new contracts, which feature lower production shares (now in the 10-12% range, down from 20% or higher), mean that companies can no longer "book reserves" (i.e., demonstrate to stockholders that they are contractually guaranteed to have access to a proven quantity of oil and gas) to the degree that they have in the past. This creates a new paradigm for Libya that is playing out worldwide in a growing number of oil-producing countries where the state and its energy authority are demanding tough terms for in-country IOCs. Winterman assesses that this trade-off between booked reserves and profit is creating a new system where the old rules no longer apply; the thinking of IOCs' stockholders will have to evolve to reflect the fact that their companies' stock values should be evaluated differently in an environment where reserves are harder to replace. Because this new way of thinking is still evolving, lowered production shares have the potential to hurt companies' stock prices in the short term. 8. (C) An additional consideration in this regard is the recent surge of interest in Libya on the part of non-Western IOCs (particularly from India, Japan, Russia and China), who have won the bulk of concessions in the NOC's recent acreage bid rounds. These government-owned companies are driven by the desire to book reserves to assure supply to their domestic markets in the years to come. Assuming that their exploration of Libyan acreage bears fruit in the discovery of exploitable reserves, they may find that NOC terms allow them to book less in reserves that they had hoped. With that prospect in the offing, the interest of companies primarily concerned with booking reserves may wane as they consider making the jump to producing entities. ..AND GREATER NOC INVOLVEMENT NOT A PANACEA 9. (C) Although the new agreements carry substantial benefits, the more central involvement of the NOC does not by itself guarantee more efficient operations. Winterman stressed that the NOC is still more concerned with "price over performance," and can often be a difficult sell when it comes to using the latest (more expensive) technologies to generate efficiencies and augment output. He also questioned whether the NOC would be willing and able to hold up its end of the investment burden, as it has shown reluctance to make the kind of substantial re-investments in existing fields that their $2.5 billion commitment under the Oxy deal requires. Delays are likely, particularly given the NOC's haphazard budgeting process. For example, the NOC only received approval for the current year's budget in June, and even that approval only resulted in flatlined spending along the same lines as the previous year. Also, although the NOC retains many skilled technocrats with long experience and educational ties to the U.S., that group represents a dying breed (nearing retirement age), and the NOC's TRIPOLI 00000563 003.2 OF 003 bench strength is being rapidly depleted as many of its best personnel take more lucrative opportunities in the private sector in Libya and abroad. The fact that the Eni, Petro-Canada and Oxy deals were hammered out using a common text reinforces the notion that the NOC is seeking to simplify the terms under which companies operate, in part because of its own limited institutional capacity. NEXT ON THE BLOCK: EVERYONE ELSE 10. (C) Winterman was confident in predicting that Repsol (Spain), Wintershall (Germany) and TOTAL (France) were the next IOCs who would be forced to extend their presence in Libya via the signing of new EPSA agreements. After that, the next major set of operators will be the companies of the Oasis Group, composed of U.S. firms ConocoPhillips, Marathon and Hess. This NOC approach is reportedly on the horizon, despite the fact that the Oasis companies paid $1.8 billion in December 2005 to reclaim their former Sirte basin acreage in concert with local operator Waha (the eponymous Libyan state-run oil company that took over the fields when they left) following two years of negotiations with the NOC. The Waha-Oasis group currently produces about 350,000 bbl/day, roughly one-fifth of Libya's total oil output. Econoff has been told separately by the Country Managers of both ConocoPhillips and Marathon that senior NOC officials have hinted that a new deal with the Oasis group should be negotiated soon. 11. (C) This will present a unique challenge for the Oasis group, as the two major shareholders (CP and Marathon) reportedly have very different corporate priorities in Libya. For Marathon, whose booked Libyan production accounts for some 60% of the company's worldwide total, a reduction in production rate under an EPSA could have serious repercussions for the company's share price. On the other hand, ConocoPhillips is judged to have sufficient worldwide booked reserves that a drop in its production share would not be such a major blow, and its overall size puts it in a better position to reinvest the greater financial returns stemming from a new deal. Both would benefit from being freed from the intransigence to change shown by their counterparts in Waha (who routinely deflect their proposals for field development projects), but it may prove difficult for the Oasis partners to adopt a shared approach when the NOC begins to press in earnest for a extension of their presence. 12. (C) COMMENT: Although the concession extensions carry some positive aspects, the fact that the NOC may be prepared to reopen negotiations with the Oasis group is troubling. If the Waha consortium is forced to renegotiate after cementing a deal less than three years ago at a cost of $1.8 billion, can it - or any other IOC operating in Libya - reasonably expect that the new agreements will stand the test of time? Given the GOL's political approach to economic policymaking, as well as its penchant for extracting maximum concessions for production of its hydrocarbon resources, how long would revenue from oil that could hit $175 or $200/bbl oil be allowed to accrue to foreign companies before the GOL would (again) seek a larger cut? While the answer to that question remains to be seen, it is clear is that the recent contract extensions have set Eni, Petro-Canada and Oxy apart as leaders in the Libyan energy sector. It is expected that they will account for at least 55% of Libya's total oil production if the terms of their contracts are fulfilled. End comment. GODFREY. 2008-07-13 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI566 LIBYA SIGNS CIVILIAN NUCLEAR DEAL WITH FRANCE 2008-07-14 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI567 THE EU-LIBYA FRAMEWORK AGREEMENT: VENI, VISAS, VETO 2008-07-14 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI574 U.K. VISIT TO RABTA CHEMICAL WEAPONS PRODUCTION FACILITY 2008-07-14 2011-02-01 CONFIDENTIAL Embassy Tripoli
08TRIPOLI577 QADHAFI FOUNDATION CONTINUES DIALOGUE ON RELEASE OF FORMER 2008-07-15 2011-02-01 CONFIDENTIAL Embassy Tripoli
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