Identifier
Created
Classification
Origin
04AMMAN2780
2004-04-13 14:56:00
CONFIDENTIAL
Embassy Amman
Cable title:  

U.S. COMPANY WINS DEFENSE FUELS CONTRACT LOST BY

Tags:  EPET ETRD MOPS 
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131456Z Apr 04
C O N F I D E N T I A L AMMAN 002780 

SIPDIS

PLEASE PASS DOD FOR DEFENSE ENERGY SUPPORT CENTER
STATE FOR ACIS/MFREEDMAN, PM, NEA/ARN

E.O. 12958: DECL: 04/13/2024
TAGS: EPET ETRD MOPS
SUBJECT: U.S. COMPANY WINS DEFENSE FUELS CONTRACT LOST BY
JORDANIAN FIRM: LESSONS LEARNED


C O N F I D E N T I A L AMMAN 002780

SIPDIS

PLEASE PASS DOD FOR DEFENSE ENERGY SUPPORT CENTER
STATE FOR ACIS/MFREEDMAN, PM, NEA/ARN

E.O. 12958: DECL: 04/13/2024
TAGS: EPET ETRD MOPS
SUBJECT: U.S. COMPANY WINS DEFENSE FUELS CONTRACT LOST BY
JORDANIAN FIRM: LESSONS LEARNED



1. (C/NF) SUMMARY: The U.S.Firm Trigeant has replaced
the Jordanian-owned Shahin Group under part of a $71.8
million contract to supply refined oil products to Iraq for
the Defense Energy Support Center. The Shahin Group was
terminated for cause because it was unable to deliver the
amount of diesel fuel required under part of its contract.
The Shahin Group is well-known to the Embassy and the Embassy
recommends that DESC coordinate with the Embassy on future
contracts that may involve Jordanian companies. This could
also serve as a model for contracting in other areas
involving companies registered in Jordan. END SUMMARY.


2. (C/NF) On April 3, the Jordanian-owned Shahin Business
and Investment Group commenced operations under its $71.8
million Defense Energy Support Center (DESC) contract to
deliver refined oil products to the Ramadi fuel depot outside
Baghdad. It had been the low bidder, winning over two
American firms. However, after Shahin demonstrated that it
was unable to supply the diesel required under part of this
contract, Shahin was terminated for cause on April 10 for
that part of the contract. This development falls into a
pattern of unmet commitments by Shahin Group. DESC then
awarded this part of the contract to Trigeant Ltd., a
privately-owned oil refining, marketing, distribution, and
transportation company based in Boca Raton, Florida, which
had been the original next-lowest bidder. In the deal,
Trigeant is partnered with Jordan's National Resources
Development Company, a state entity involved in developing
land previously owned by the Jordanian military.


3. (C/NF) In order to speed the delivery of the diesel,
Trigeant arranged a swap with Jordan's Zarqa refinery and
will bring in further shipments through Aqaba. The contract
is for three months with options for renewals of three
further consecutive three-month periods. According to
Trigeant's President, Harry Sargeant, diesel shipments were
under way by truck from Aqaba by April 12. All the shipments
were sent in trucks driven by Iraqi drivers but Sargeant was
hopeful that Jordanian truckers would soon be competing for
this business.


4. (C/NF) According to reports, Shahin was unable to locate
the financing needed to fulfill this part of the contract,
partially because of its lack of standing and the lack of a
track record in the international oil trading community.
This development is also consistent with a documented pattern
of experience with Shahin.


5. (C/NF) COMMENT: The Embassy, both in its Commercial
Section and elsewhere, is very knowledgeable about Jordanian
contractors. As part of its normal support for U.S.
companies, the Embassy can provide Company Profile Reports on
companies registered in Jordan. For future contracts by DESC
or other agencies or organizations working on supporting USG
efforts in Iraq, the Embassy strongly recommends an early
query to the Embassy for Company Profile Reports as well as
for any other relevant information we can provide.
GNEHM