Identifier
Created
Classification
Origin
05CARACAS1205
2005-04-22 18:06:00
CONFIDENTIAL
Embassy Caracas
Cable title:  

AMBASSADOR'S TRIP TO ANZOATEGUI STATE

Tags:  PGOV PREL PHUM ECON VE ENGY 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.

221806Z Apr 05
C O N F I D E N T I A L CARACAS 001205 

SIPDIS


NSC FOR CBARTON
STATE PAS USAID FOR DCHA/OTI

E.O. 12958: DECL: 03/22/2025
TAGS: PGOV PREL PHUM ECON VE ENGY
SUBJECT: AMBASSADOR'S TRIP TO ANZOATEGUI STATE


--------
SUMMARY
--------

C O N F I D E N T I A L CARACAS 001205

SIPDIS


NSC FOR CBARTON
STATE PAS USAID FOR DCHA/OTI

E.O. 12958: DECL: 03/22/2025
TAGS: PGOV PREL PHUM ECON VE ENGY
SUBJECT: AMBASSADOR'S TRIP TO ANZOATEGUI STATE


--------------
SUMMARY
--------------


1. (C) The Ambassador's trip to Anzoategui State March 8-9
concentrated on the Barcelona/Puerto La Cruz area and the
Jose industrial complex - a multi-billion dollar US
investment. The objectives were to emphasize the importance
of the US-Venezuelan oil relationship, to get a better sense
of the realities faced by that industry, and to highlight the
contributions of USAID and private sector social and local
governance projects to the community. The picture that
emerged was of a region experiencing unprecedented growth
driven by oil industry investment. A significant risk factor
to continued positive growth, however, appears to be the host
government's tendency to let politics guide its industry
decisionmaking. Oil industry response to its Venezuelan
counterparts is steady but cautious, and there is a growing
emphasis on contingency planning as industry leaders attempt
to rationalize an increasingly irrational operating
environment. END SUMMARY.


2. (U) Visiting Anzoategui State March 8-9, the Ambassador
met with local political leaders, oil industry executives,
and media outlets. He visited social and local governance
projects sponsored by USAID and ExxonMobil. He also conducted
a town hall for the American citizen community in the area.

--------------
Political Leaders
--------------


3. (C) The political situation in Anzoategui is highly
factional, with the political leadership of the region
preoccupied with internal battles. Friction between
conflictive strains of Chavismo and the Governor and some
mayors has resulted in a charged political atmosphere. The
Ambassador met with mayors representing both ends of the
political spectrum - MVR Mayor of Barcelona Jose Perez
Fernandez and Primero Justicia Mayor of Lecheria Gustavo
Marcano. MVR Governor William Tarek Saab declined to meet
with the Ambassador.


4. (C) Mayor Jose Perez Fernandez, an ex-Captain and local
member of the MVR greeted the Ambassador upon arrival at
Barcelona airport. Perez did not officially agree to meet

with the Ambassador until March 7. During the short meet and
greet session, the Ambassador and Perez exchanged formalities
and touched upon Perez's socio-economic prognosis for
Barcelona, with the Ambassador pointing to the positive
social contributions of USAID and US private investment
within the community.


5. (C) The Ambassador also met with Gustavo Marcano, a first
term Primero Justicia mayor serving the upscale district of
Lecheria, on the afternoon of March 8. Marcano is a potential
IV grantee. During the meeting, the Ambassador probed for
potential areas of cooperation, and while the meeting turned
up little in the way of concrete suggestions by Marcano, the
Ambassador left the door open for future cooperation in the
areas of education, social investment and commerce.

--------------
Oil Industry Executives
--------------


6. (U) Anzoategui is oil country and the economic focus of
the Ambassador's trip was on the oil industry. The Ambassador
met with representatives from the three U.S. industry majors
operating in Anzoategui - ConocoPhillips, ChevronTexaco, and
ExxonMobil. He also visited the Jose petrochemical complex -
which represents an estimated $7B in US investment - to tour
the Ameriven-run Hamaca Upgrader. The Hamaca project is the
fourth and final of the joint venture projects at Jose and is
operated by Petrolera Ameriven - a joint venture between
ConocoPhillips, ChevronTexaco, and PDVSA.


7. (C) On the afternoon of March 8 in Puerto la Cruz, Bud
Chamberlain, Vice-President of ConocoPhillips de Venezuela,
walked through a two-part presentation on the Corocoro
natural gas project and ConocoPhillips' sustainable
development program. The Corocoro project is being developed
in two phases, he said, to mitigate risks associated with a
lack of detailed reservoir knowledge and an evolving
political situation. The Q&A session following the
presentation focused on PDVSA as a partner and the growing
presence of the People's Republic of China in the Venezuelan
market. ConocoPhillips' consensus on PDVSA, according to

Chamberlain, is that PDVSA has quantity and quality of
personnel issues which impair its effectiveness as a partner.
ConocoPhillips executives pointed to a braindrain from PDVSA
as well as a basic lack of manpower. PDVSA has moved to
restrict participation by former employees in joint venture
projects, even when they are on the foreign company's
payroll. Chamberlain was noncommittal about PRC presence,
stating that he tended not to see the industry in terms of
influxes of people.


8. (C) ChevronTexaco's Kevin Owens (Operations and
Engineering Manager Venezuela Offshore) and Kent Mangold
(Earth Science Manager Venezuela Offshore) told the
Ambassador the Deltana project is operational: Block 3
drilling has commenced and first gas is expected by 2010 with
some room for slippage. At an oil industry dinner hosted by
ChevronTexaco on the evening of March 8, ChevronTexaco's Dave
Nelson noted the recent public statements by Citgo executives
that the company had been overcharging and benefiting from
transfer payments. Nelson told the Ambassador there would be
significant tax liabilities that could be investigated if
this were the case.

--------------
Media Outlets
--------------


9. (U) The Ambassador conducted a series of executive
meetings and interviews with media outlets in radio, TV and
print. The Ambassador's trip was well-covered with several
outlets also running his interviews in states outside of
Anzoategui. Overall, press concerns centered on trip
objectives, the continuity of the US-Venezuelan oil
relationship, and the alleged US assassination plot story.


10. (C) The Ambassador commenced his press tour with an
executive meeting and interview at 870 Pueblo AM. Executive
meeting attendees included Nelson Belfort Jr. (Circuito
Nacional Belfort President),Juan Carlos Millan (Director)
and Juan Jose Bartolomeo (Institutional Relations Director).
Off-the-record discussion points focused on the economic
growth of the region and the local political scene. Radio
executives were positive on the economy, however noted its
absolute dependency on oil and lack of a secondary service
industry with some concern. Internal battles between
competing strains of Chavismo were a distraction for the
local government, they said. The on-the-record interview was
conducted by Carlos Acosta and Maria Isabel Parraga and ran
nationally.


11. (C) The Ambassador also met with Diario El Tiempo
(opposition) newspaper and Televisora de Oriente on the
morning of March 9th. The executive meeting with Diario El
Tiempo was attended by Maria Alejandra Marquez (Executive
President) and Carmen Guervara (Institutional Relations
Manager). In a far-ranging discussion over breakfast, Marquez
elaborated on the development challenges faced by the region,
making the point that while growth is an overall positive for
the region, it is characterized by the stops and starts of
the petroleum industry because development has not been
evenly distributed among other sectors. Marquez said it also
placed undue stress on a local infrastructure ill-equipped to
deal with the challenges posed by rapid growth. As an aside,
Marquez noted that she expected the Governor to use Mayor
Perez Fernandez's meeting with the Ambassador as an excuse to
oust him. An on-the-record interview was conducted by the
editorial staff of the paper.


12. (C) Following his interview with El Tiempo, the
Ambassador proceeded to Televisora de Oriente (opposition),
where he met with Pascual Cirigliano (President),Domingo
Cirigliano (Vice-President),and Francisco Lopez Pando
(Executive Vice-President). Discussion focused on the local
political scene and the difficulties of operating under the
new content law. Executives noted the friction between the
Governor and some mayors, citing the Governor's claim to the
national access the mayors once enjoyed as a potential cause
of discord. The Ambassador then taped an interview before
departing.

--------------
Community Outreach Projects
--------------


13. (U) An important theme of the Ambassador's trip was the
social contribution made to the region by public and private
US sources of cooperation. To highlight this contribution,
the Ambassador visited two USAID-sponsored projects - Gente

de Soluciones and FUNIDIS - and a community center sponsored
by Operadora Cerro Negro, an ExxonMobil affiliate. The
Ambassador attended a signing ceremony for Gente de
Soluciones on March 8 at the Mayor of Lecheria's offices.
Gente de Soluciones is an NGO registered by the Local
Committee for Public Planning (CLPP),and will use a $28K
USAID grant for a program strengthening women's involvement
in the CLPP. The USAID-sponsored NGO - the Foundation for
Handicapped Children (FUNIDIS) - focuses on providing
physical therapy to children with motor dysfunctions. FUNIDIS
received a USAID donation for $25K to purchase equipment and
rehabilitate the center.


14. (C) The Ambassador continued on to the barrio of El
Vinedo, where ExxonMobil via its affiliate Operadora Cerro
Negro operates a community center. Over an informal lunch at
the center, ExxonMobil President de Venezuela Mark Ward told
the Ambassador that ExxonMobil had selected the center's
location because the community at El Vinedo has a history of
blocking the road to the Jose Industrial Complex, yet was
open to social work from the oil industry. The Ambassador
offered Ward support for any future social investment project
ExxonMobil might be considering.

--------------
American Community Town Hall
--------------


15. (U) The Ambassador addressed a town hall meeting at the
Colegio Internacional Puerto La Cruz on the evening of March

8. Approximately 80 American citizens attended. After brief
remarks by the Ambassador, the floor was opened to questions.
Questions from the audience centered on US-Venezuelan
bilateral relations and whether and how they might improve,
and the ongoing assassination plot story. There was also a
small but vocal group of American boaters who voiced their
concerns regarding the security problems they encounter in
Venezuelan waters.
Brownfield


NNNN
2005CARACA01205 - CONFIDENTIAL