This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T ALMATY 001932
E.O. 12958: DECL: 05/20/2015 TAGS: KZ MOPS PREL POLITICAL SUBJECT: KAZAKHSTAN: EFFORTS TO OVERTURN BAN ON JET FUEL FOR GANCI
Classified By: CDA Mark Asquino, reasons 1.4 (B) and (D).
1. (C) SUMMARY: Since the April 19 ban on export of jet fuel from Kazakhstan, post has contacted every relevant ministry and agency in the GOK to request it be lifted. Beginning with an April 22 letter to Prime Minister Akhmetov, who signed the decree, Embassy has approached the Ministries of Foreign Affairs, Defense, and Energy and Mineral Resources with requests to release the fuel for which Red Star Limited Enterprises had contracted in support of coalition air operations for OEF. A May 18 meeting with Minister of Energy and Mineral Resources Shkolnik is the latest and most promising of those efforts, though there is no positive result yet. There is no evidence that the reluctance to lift the ban is part of a plan to de-stabilize the current Kyrgyz government. It is more likely that the delay in obtaining relief from the ban is due to typical obstruction within the Kazakhstani government. END SUMMARY.
2. (C) On April 19, the Government of Kazakhstan announced a ban on the export of jet fuel for a period of 90 days. While the reasons for the ban were not publicly announced, it appears that the GOK implemented it to counter rising jet fuel costs resulting from decreased production. On May 16, the President of the Kazakhstani venture Kumkul Resources Thomas Dvorak and President of PetroKazakhstan Bernard Isautier intimated to Ambassador that PetroKazakhstan was producing less jet fuel than in the past, and opined that Kazakhstan's statements that there is a domestic shortage of jet fuel may be true. While denying that the export ban was having any price control effect, both confirmed that there is ample jet fuel being produced by Russian refineries. They said that the Government of Kazakhstan could direct the refinery at Pavlodar to produce more jet fuel, and did not understand why this order had not been given yet. Minister of Energy Shkolnik told POEC chief on May 18 that rising jet fuel costs were behind the GOK's decision.
3. (SBU) Red Star Enterprises Limited, the Defense Energy Support Center's sole contractor for procuring jet fuel for Ganci Airbase in Kyrgyzstan, notified post on April 21 that due to the Kazakhstani ban and the on-going investigations of Akayev-owned businesses in Kyrgyzstan, coalition air operations might have to be reduced due to inadequate deliveries of jet fuel.
4. (C) On April 22, Embassy delivered a letter from the Ambassador to Prime Minister Akhmetov, asking that the ban be lifted for fuel supplies going to Ganci. From April 23 to May 10, Ambassador, DCM, and DATT made repeated contact with representatives of the Ministries of Defense and Foreign Affairs, encouraging these ministries to support the U.S. request to lift the ban on jet fuel exports. During a meeting with Presidential Assistant Masimov, Ambassador was informed that the ban was intended to control the rising price of jet fuel, and thereby assure that Kazakhstan has sufficient supplies at a reasonable price for its domestic needs.
5. (C) On May 11, Ambassador met with Vice President of KazMunaiGas Timur Kulibayev and First Deputy Minister of Energy and Mineral Resources Baktikhozha Izmukhambetov regarding the request to lift the ban. Kulibayev seemed supportive of the request, and recommended that the Ambassador write another letter to Prime Minister Akhmetov, asking that the ban be lifted specifically for the delivery of 4,250 tons of jet fuel for which Red Star had already paid. That letter was delivered on May 13.
6. (S/NF) During the same meeting, Kulibayev offered to import more jet fuel from Russia than Kazakhstan required, with the intention to send the excess to Ganci; he added the caveat that this proposal would take time to realize. Izmukhambetov offered his services as the point of contact for the transaction. Both noted that the fact that U.S. forces would be the final recipient of the fuel would have to be kept secret. Embassy conversations with Red Star indicated that Red Star was already seeking contracts with Russian and
other outside suppliers and that short-term relief from the ban was what was required to keep air operations at an acceptable tempo.
A Promise of Help
7. (SBU) On May 18, POEC chief raised the subject with Minister of Energy and Mineral Resources Shkolnik. Shkolnik said that he had just become aware of the impact of the export ban that morning, upon his return from overseas. He stated that supporting OEF operations out of Ganci is "our common strategic task." He asked that we provide him the specifics on how many tons of fuel were required so that he could issue the order permitting the export. Embassy sent him a copy of Ambassador's May 11 letter to Akhmetov specifying the 4,250 tons already purchased.
8. (SBU) Post is in regular contact with Red Star on the issue. Sources in Red Star report that during the April 20 meeting between Presidents Nazarbayev and Bakiyev, Bakiyev received assurances that the matter would be resolved. Red Star also reported that KG Vice Prime Minister Usenov sent Shkolnik an official letter requesting that Shkolnik prepare and release a decree authorizing the delivery of 20,000 tons of jet fuel from the refineries in Pavlodar and Shymkent to Red Star.
9. (SBU) Red Star informed Embassy Bishkek on May 20 that 1,600 MT of jet fuel had been loaded on rail cars in Omsk, Russia and was making its way to Bishkek. Red Star expects this shipment to take 5-6 days to reach Bishkek. An additional 3,400 MT has not yet been loaded, but will follow the initial shipment in increments.
10. (C) COMMENT: While we believe the case for lifting the ban for deliveries to Red Star has been made, it is not clear why the request has not yet been acted on. Contrary to rumors heard from outside the mission, we see no evidence that the jet fuel ban is intended either to limit the War on Terrorism or to destabilize the new Kyrgyz government. In all probability the reasons for the GOK's delay in lifting the ban (or refusal to do so) are murky and complex and may become clearer only in the future. The Mission will continue to do everything it can to get the ban lifted, and the jet fuel on its way to Ganci. END COMMENT. ORDWAY