Identifier
Created
Classification
Origin
06BRASILIA1017
2006-05-26 17:58:00
CONFIDENTIAL
Embassy Brasilia
Cable title:
BRAZIL'S PETROBRAS: NO INTENTION OF TAKING OVER OXY'S
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C O N F I D E N T I A L BRASILIA 001017
SIPDIS
SIPDIS
NSC FOR CRONIN
DOE FOR S.LADISLAW
TREASURY FOR OASIA - DAS LEE, DDOUGLAS
STATE PASS TO FED BOARD OF GOVERNORS FOR ROBITAILLE
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA
STATE PASS USAID FOR LAC
E.O. DECL: 05/25/2016
TAGS: EPET EINV ECON PREL BR EC
SUBJECT: BRAZIL'S PETROBRAS: NO INTENTION OF TAKING OVER OXY'S
ECUADOR ASSETS
REF: A) STATE 81527 B) BRASILIA 1006
Classified by Economic Counselor Bruce Williamson, reasons 1.4
(b) and (d).
C O N F I D E N T I A L BRASILIA 001017
SIPDIS
SIPDIS
NSC FOR CRONIN
DOE FOR S.LADISLAW
TREASURY FOR OASIA - DAS LEE, DDOUGLAS
STATE PASS TO FED BOARD OF GOVERNORS FOR ROBITAILLE
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA
STATE PASS USAID FOR LAC
E.O. DECL: 05/25/2016
TAGS: EPET EINV ECON PREL BR EC
SUBJECT: BRAZIL'S PETROBRAS: NO INTENTION OF TAKING OVER OXY'S
ECUADOR ASSETS
REF: A) STATE 81527 B) BRASILIA 1006
Classified by Economic Counselor Bruce Williamson, reasons 1.4
(b) and (d).
1. (C) In separate meetings on May 23, visiting WHA Assistant
Secretary Thomas Shannon and the Charge delivered ref A points
SIPDIS
to President Lula's chief of Staff, Dilma Rousseff, as well as
Foreign Ministry Under Secretaries Felicio and Patriota. A/S
Shannon stated that Ecuador's dispute with Occidental Petroleum
had presented the USG with a big problem and added that how it
was handled could easily impact the coming elections in that
country. Occidental is poised to take the GOE to arbitration
and the USG may open government-to-government talks under our
Bilateral Investment Treaty (BIT) and possibly even take action
against Ecuador's preferential market access privileges. The
USG is trying to approach the issue in a way that is
non-inflammatory, but the GOE must be made to understand how
serious a problem this could be. U/S Felicio noted that the GOE
had contacted Petrobras about helping out in managing recently
nationalized sectors, but Petrobras emphatically declined,
noting that it had a very full plate at the moment.
2. (SBU) The Charge also made ref A points to Petrobras
International Director Nestor Cervero in a May 26 meeting at
Petrobras headquarters in Rio de Janeiro (see septel). Cervero
stated that Petrobras had no intention of taking over
Occidental's Ecuador assets. He noted that Petrobras and
Occidental were partners in several projects in the United
States and that it would be bad policy for Petrobras to
undermine its relationship with Occidental by taking over its
Ecuador assets. A similar situation had come up with regard to
Sudan, Cervero stated, and Petrobras had likewise demurred.
Petrobras does not intend to abandon its other Ecuador projects
despite the GOE action against Occidental, he added.
CHICOLA
SIPDIS
SIPDIS
NSC FOR CRONIN
DOE FOR S.LADISLAW
TREASURY FOR OASIA - DAS LEE, DDOUGLAS
STATE PASS TO FED BOARD OF GOVERNORS FOR ROBITAILLE
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/SHUPKA
STATE PASS USAID FOR LAC
E.O. DECL: 05/25/2016
TAGS: EPET EINV ECON PREL BR EC
SUBJECT: BRAZIL'S PETROBRAS: NO INTENTION OF TAKING OVER OXY'S
ECUADOR ASSETS
REF: A) STATE 81527 B) BRASILIA 1006
Classified by Economic Counselor Bruce Williamson, reasons 1.4
(b) and (d).
1. (C) In separate meetings on May 23, visiting WHA Assistant
Secretary Thomas Shannon and the Charge delivered ref A points
SIPDIS
to President Lula's chief of Staff, Dilma Rousseff, as well as
Foreign Ministry Under Secretaries Felicio and Patriota. A/S
Shannon stated that Ecuador's dispute with Occidental Petroleum
had presented the USG with a big problem and added that how it
was handled could easily impact the coming elections in that
country. Occidental is poised to take the GOE to arbitration
and the USG may open government-to-government talks under our
Bilateral Investment Treaty (BIT) and possibly even take action
against Ecuador's preferential market access privileges. The
USG is trying to approach the issue in a way that is
non-inflammatory, but the GOE must be made to understand how
serious a problem this could be. U/S Felicio noted that the GOE
had contacted Petrobras about helping out in managing recently
nationalized sectors, but Petrobras emphatically declined,
noting that it had a very full plate at the moment.
2. (SBU) The Charge also made ref A points to Petrobras
International Director Nestor Cervero in a May 26 meeting at
Petrobras headquarters in Rio de Janeiro (see septel). Cervero
stated that Petrobras had no intention of taking over
Occidental's Ecuador assets. He noted that Petrobras and
Occidental were partners in several projects in the United
States and that it would be bad policy for Petrobras to
undermine its relationship with Occidental by taking over its
Ecuador assets. A similar situation had come up with regard to
Sudan, Cervero stated, and Petrobras had likewise demurred.
Petrobras does not intend to abandon its other Ecuador projects
despite the GOE action against Occidental, he added.
CHICOLA