BURGAS-ALEXANDROPOLI PIPELINE: GREEK REACTION TO

UNCLAS ATHENS 001156 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ECON PGOV ENRG GR SUBJECT: BURGAS-ALEXANDROPOLI PIPELINE: GREEK REACTION TO BULGARIAN CONSORTIUM RESTRUCTURING ¶1. (U) Summary: On May 3rd, Greek press sources reported that the Bulgarian Government was withdrawing its interest from the proposed Burgas-Alexandropoli Oil Pipeline (B-A), touching off widespread media speculation that the entire pipeline deal was in jeopardy. Additional press reports, however, had Bulgarian Foreign Minister Kalfin and Greek Foreign Minister Bakoyannis refuting these reports completely. No one in the GoG has been able (or willing) to answer any of our requests for additional information. However, Naftemboriki, the most reliable of Greek economic papers, reported that the GoB decision was not a signal that it was getting out of the B-A pipeline, but only a reshuffle of Bulgarian companies participating in the consortium slated to build and operate the Bulgarian portion of the B-A. Post attributes the Greek media hysteria surrounding this action as attributable (in at least part) to Secretary Rice's recent visit to the region and commentary on energy issues, since many of the reports drew complicated (and specious) connections between her visit and supposed Russian pressure on Bulgaria to terminate the project. End Summary. "Steadfast and Undiminishing" -------------- ¶2. (U) On May 3rd, Greek press sources reported that the Bulgarian Government was withdrawing its interest from the proposed Burgas-Alexandropoli Oil Pipeline (B-A),touching off widespread media speculation that the entire pipeline deal was in jeopardy. Additional press reports, however, had Bulgarian Foreign Minister Kalfin and Greek Foreign Minister Bakoyannis refuting these reports completely. At a private meeting in Thessaloniki where regional leaders were attending the SEECP Summit meeting, the Bulgarian FM met with the Greek FM who reported that the Bulgarian interest in BA was "steadfast and undiminishing." Greek PM Kostas Karamanlis and Deputy FM Evripides Stylianides also met with their Bulgarian counterparts in private meetings, who confirmed the GoB's commitment to BA on every level. ¶3. (U) No one at the Greek MFA or Ministry of Development (the two ministries involved in the B-A deal) has had any additional information on this topic. Our sole source of meaningful information has come from the generally reliable daily economic paper, Naftemboriki, which reported this as an issue between the GoB and private companies involved in a consortium to build and operate the Bulgarian portion of the B-A pipeline. According to this report, the GoB dissolved the consortium in order to form a new one, with new members, not because of any desire or intention of abandoning the project. ¶4. (U) Comment: Embassy is inclined to believe that this press frenzy in more related to the Secretary's recent visit to Athens than to any substantive knowledge of or interest in the B-A pipeline. It is unfortunate that the Greek media continues to look for and create incredible linkages between the Secretary's presence and any activity occurring in the region. Post has no information to suggest any Russian efforts to shut down the project, which is not surprising, as the Russians will have at least 51 percent operating control over the pipeline, which is destined to carry largely Russian produced and/or contracted oil. The GoB's actions are consistent with earlier rumors that the Bulgarian BA consortium was having difficulty and that he GoB would be seeking to replace them. To the best of post's knowledge, this tempest in a teacup is another Greek media special. End Comment. Ries