Identifier | Created | Classification | Origin |
---|---|---|---|
05DJIBOUTI924 | 2005-09-15 12:03:00 | CONFIDENTIAL | Embassy Djibouti |
This record is a partial extract of the original cable. The full text of the original cable is not available. |
C O N F I D E N T I A L SECTION 01 OF 02 DJIBOUTI 000924 |
1. (C) ExxonMobil corporation has begun the process in Djibouti of transferring shares in Mobil Djibouti to French oil giant Total, following ExxonMobil's official announcement September 5 in Brussels that it had sold to Total shares of fuels and lubricants' affiliates in 14 African countries. The 14 African countries are Chad, Djibouti, Ethiopia, Eritrea, Ghana, Guinea, Liberia, Malawi, Mauritius, Mozambique, Sierra Leone, Togo, Zambia and Zimbabwe. 2. (C) Arnaud Blouin, a French national who is President and Director General of ExxonMobil Tunisia, arrived in Djibouti nearly two weeks ago to lead the transfer process. In a meeting September 11 with Ambassador, Blouin, accompanied by outgoing Mobil Djibouti President Alain Adam, described his role as "caretaker" and "facilitator" until the transfer process is complete, "hopefully before Christmas," he said. Blouin will be based in Djibouti but will travel every three weeks to Tunis. In the interim, Adam will move to Tunis to act in Blouin's place. Adam's departure is set for September 20. (Comment: Adam has faced personal difficulty with Djiboutian authorities, who took steps in late July to permanently bar him, while he was on vacation, from returning to Djibouti. After interventions with the Djiboutian government by the Ambassador and Mobil's regional director in Nairobi, Adam was permitted to return for a minimum period. See Ref A. At that time, the government of Djibouti was unaware of the pending deal between ExxonMobil and Total. End comment) Blouin reviewed details of the transfer with Ambassador, which tracked ExxonMobil's official announcement. When asked about the advantage to ExxonMobil of the transaction, Blouin opined that it gave ExxonMobil an opportunity to divest in a painless way some of its not-so-profitable operations. In particular, in the case of Mobil Djibouti, the transfer relieved ExxonMobil of the issue of the disposition of its physical assets in country and ongoing claims by the Djiboutian government regarding pollution at Mobil Djibouti's fuel storage site in the existing port facility. 3. (C) In a subsequent meeting (September 14) requested of the Ambassador by Francois de Charnace, Director General of Total Djibouti, Charnace told the Ambassador that Total agreed to accept from ExxonMobil a "basket" of national operations in the fuels/lubricants domain, some of which were individually negotiated. Most are of equivalent size. He said Total may have declined other possible domains -- perhaps larger -- because it already controlled a sizable share of the market there. Total sees the purchase of shares in the Horn of Africa as an advantage, according to Charnace, because it permits an increase in market share for Total in the region. In addition, given the long-term commitment of France to Djibouti, both historically and practically, the move made economic sense. 4. (C) Charnace also advised that acquiring Mobil will put Total in a uniquely advantageous position politically in Djibouti. He said the company is not interested in re-locating to the new Doraleh port oil storage terminal, despite the directive given all oil companies here last year that made the move obligatory before January 1, 2006. Total will be in a position, Charnace said, to put pressure on the government to permit Total to keep its current depot in the existing port. For starters, he said, Total will control all of the fuel services for the U.S. and French military bases and will likely become the primary supplier for the Djiboutian military and Djiboutian government. This could give it considerable leverage with the government of Djibouti. Charnace did not see Shell, which may remain, as a significant competitor. 5. (C) Charnace, Blouin and Adam had earlier briefed the Minister of Presidential Affairs, Osman Ahmed Moussa, in the wake of the announcement. Charnace said the first question asked by Osman was whether Mobil was pulling out because of the "situation" with Adam. Charnace said he believes the Djiboutian government retains the view that Mobil pulled out of Djibouti because of the government's treatment of Alain Adam, despite Mobil's assurances to the contrary. Charnace noted to Ambassador, however, that the blow-up over Adam had been of particular interest to the business community in France. Community members interpreted the government's actions as one of retaliation against a businessman simply because he tried to collect a legitimate debt owed by the Djiboutian government. The call for Adam's ouster, coming on the heels of a similar incident involving a French banker in Djibouti, raised the question in the French community about whether a business person could ever feel safe doing business in Djibouti. "Not the right message to send," Charnace said. Charnace said the government of Djibouti had been very keen to ensure that in the transfer, there was no dismissal of Mobil Djibouti employees so as to avoid the possibility of a labor blow-up over loss of jobs. Both Mobil and Total assured that the employee transition, including with pensions and benefits, would be seamless. 6. (C) Neither Mobil or Total representatives would give a value figure to this commercial transfer. RAGSDALE |