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IdentifierCreatedClassificationOrigin
04DJIBOUTI1586 2004-12-13 10:33:00 CONFIDENTIAL Embassy Djibouti
Cable title:  

MOBIL AND GOVERNMENT OF DJIBOUTI OUTSTANDING

Tags:   PREL ECON ETRD PGOV SCUL DJ 
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					C O N F I D E N T I A L SECTION 01 OF 02 DJIBOUTI 001586 

SIPDIS

STATE FOR AF, AF/E, AND DS/OSAC
STATE ALSO FOR AF/EPS COMMERCIAL COORDINATOR ADA ADLER

E.O. 12958: DECL: 12/13/2014
TAGS: PREL ECON ETRD PGOV SCUL DJ
SUBJECT: MOBIL AND GOVERNMENT OF DJIBOUTI OUTSTANDING
ARREARS


Classified By: AMBASSADOR MARGUERITA RAGSDALE.
REASONS 1.4 (B) AND (D).



1. (C) Mobil Oil's Chief Executive in Djibouti, Alain Adam,
met late on December 8 on an urgent basis with Ambassador to
report that he had been approached at his office only an hour
earlier by two representatives of Djibouti's security forces.
They had come to arrest him at the behest of Djibouti's
Director of Finances at the Ministry of Finance, Abdullahi
Guedi.



2. (C) According to Adam this action was an outcome of the
decision Adam had taken to terminate all fuel and oil
supplies to the Government of Djibouti effective December 6
until Djibouti made an effort to settle its nearly
112,000,000 Djiboutian Francs ($633,000) indebtedness to
Mobil for fuel and oil already delivered under contract to
the Government of Djibouti. At a minimum, Mobil was seeking
immediately 40,000,000 Djiboutian Francs ($226,000), a 90-day
arrears. Adam said he had told the security officers that
there was no basis for the Director's move to have him
arrested and that he had merely attempted to collect a
legitimate government-owed debt. Adam presented evidence to
the police of the indebtedness. He said the security
officials told him that they would depart but would return
after they had further consulted with their superiors. Adam
left his office immediately after the security officials, to
meet with his attorney, Alain Martinet, and subsequently with
Ambassador. Ambassador urged Adam to follow his attorney's
advice and to keep the Ambassador informed on developments.
As Mobil is an American company she stood ready to assist the
company work with Government officials, if Mobil wishes her
to do so. Adam thanked Ambassador and pledged to keep her
informed.



3. (C) Fortunately, Djiboutian security officials did not
return to complete their arrest of Adam. However, Adam, as a
follow-up, sent a letter the next day, with copy to the
Ambassador, outlining Government of Djibouti arrears to Mobil
for fuel deliveries extending back to February, 2004. On
December 13, Adam met with Hassan Said, Director of National
Security Services, who, according to Adam, confirmed sending
the security forces to have him arrested. Adam said he told
Said that he understood Djibouti was in temporary financial
difficulty, but that Mobil was a company that also had
responsibilities. Said had been attentive, Adam reported.
He told Adam he would raise the matter directly with
President Guelleh. There should, Said had stated, be a
response in a couple of days.



4. (C) The evening prior, French Ambassador Phillippe Selz
approached Ambassador at a reception and advised her of his
plans to raise the threat of arrest and deportation of Adam
with Djiboutian authorities. Selz explained that as Adam is
a French citizen, he had an obligation to move to avoid an
incident posed by his possible arrest and deportation.
Ambassador told Selz that as Mobil is a U.S. company, she is
very concerned by the security forces' actions and was
prepared to intercede with the Government of Djibouti, if
Mobil requests that she do so. Her concern, of course, would
be reassurance of equitable and fair treatment for this U.S.
company which is seeking payment of an outstanding bill for
services rendered.



5. (C) Summary: Adam and Director of Finances Guedi have
little rapport at this point. Guedi has threatened Adam that
Mobil will "never" receive its money owed if it doesn't
continue with fuel deliveries. Adam pledges to continue to
refuse delivery. Guedi is facing pressure from a government
constantly forced by budgetary difficulties to juggle its
creditors and accounts. Adam, a business person, is looking
at the bottom line and business purpose. Might the
Djiboutians look elsewhere for fuel needs? Adam insists that
Mobil has been the sole company among the three suppliers in
Djibouti willing to provide fuel on credit to Djibouti. There
are, nevertheless, reasons to be optimistic that the
Government of Djibouti will not move further to carry out its
threat to arrest Adam. Adam has done a fairly good job of
informing key players of his dilemma and the optics of an
arrest on grounds of a demand for legitimate payment are not
at all good for Djibouti. Our guess is that at least part of
the arrears will be settled in the coming days, although we
are not sure out of what financial hat this rabbit will
eventually be pulled. End comment.
RAGSDALE