PETROCARIBE UPDATE #26: ST. LUCIA PM'S OFFICE

C O N F I D E N T I A L BRIDGETOWN 001743

SIPDIS

SIPDIS

SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 09/22/2016
TAGS: ENRG EPET EINV PREL PGOV ST VE XL
SUBJECT: PETROCARIBE UPDATE #26: ST. LUCIA PM'S OFFICE
CLAIMS "AFFORDABLE OIL" WILL NOT BECOME A CAMPAIGN ISSUE,
BUT...

REF: BRIDGETOWN 312

Classified By: CDA Mary Ellen T. Gilroy for reasons 1.4(b) and (d).


1. (C) SUMMARY: The Press Secretary to St. Lucia's Prime
Minister confirmed press reports that St. Lucia and Venezuela
will soon sign a bilateral Petrocaribe agreement and that
Petroleos de Venezuela SA (PDVSA) made a separate deal with
Hess Oil to use its storage facilities on Saint Lucia for
Petrocaribe oil. He emphasized, however, that the bilateral
agreement has not yet been signed as the press alleged. He
also emphasized that the oil agreement will not be used as an
campaign issue. Opposition leaders expressed concern that a
Petrocaribe agreement will make St. Lucia politically
dependent on Venezuela and that, if the opposition United
Workers Party wins the upcoming election, it may move away
from Petrocaribe agreements. END SUMMARY.

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AGREEING TO AGREE
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2. (C) Earl Bousquet, Press Secretary to Prime Minister Kenny
Anthony told PolOff on both September 21 and 25 that St.
Lucia and Venezuela have not yet finalized a bilateral oil
agreement as press sources have stated. According to
Bousquet, the countries have agreed to sign but are still
working out many of the details. These include what form the
oil will be delivered in (i.e., crude, refined, diesel,
liquid petroleum gas),where it will be refined, and whether
Venezuela will use St. Lucia as a transshipment point for
deliveries to other countries. Bousquet explained that
representatives of the Venezuelan National Petroleum Company
(PDSVA) met with the Prime Minister and Saint Lucia's
National Task Force on Renewable Energy in mid-September to
iron out details in the oil agreement. Louie Louis,
Permanent Secretary for Trade and Commerce and a member of
the Task Force, stated that there are "some real significant
factors" that need to be resolved before St. Lucia will sign.
He explained that the only agreement reached when PDSVA left
St. Lucia on Friday, September 22, was an agreement for
future deliberations.


3. (C) Bousquet also confirmed that Venezuela has agreed with
Hess Oil to use its nine million barrel storage facility on
St. Lucia. He stated that Venezuela made this deal directly
with Hess Oil without input from St. Lucia. According to
Bousquet, PDVSA representatives flew to New York to meet with
John Hess, CEO of Armeda Hess. In this instance, St. Lucia
is not expected to make concessions to Venezuela for not
using a publicly owned storage facility, as the original
Petrocaribe agreement demands.

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INDEPENDENT OF ELECTIONS
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4. (C) According to Bousquet, the achievement of a bilateral
agreement to import Venezuelan oil will not be used as a
campaign issue this fall. He stated that instead of rushing
the agreement in time for the elections, the Prime Minister
is being very deliberative in reviewing the Petrocaribe
arrangements. Bousquet also stated that it is very unlikely
that any Venezuelan oil will be shipped before the elections
and that using Petrocaribe as an election issue would be
pointless because both the opposition and the voters would
recognize it as just that. (Note: St.Lucia, along with
Belize, is one of only two countries expressing early
interest in Petrocaribe that have still not signed bilateral
agreements. Barbados and Trinidad and Tobago stated early on
that they have no intention to participate in Petrocaribe.
End Note.)


5. (C) Bousquet further explained that, by the time of the
elections, there will be little enough progress on the
Petrocaribe agreement that if the current opposition United
Workers Party (UWP) wins the election, it will still be
possible to undo the agreement if the UWP chooses to do so.
He also stated that, if the UWP does not take power after the
elections, the government will ensure that the bilateral
agreement between St. Lucia and Venezuela has an escape
clause in it to ensure that no future government has its
hands tied by the agreement.



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UWP CONCERNED ABOUT PETROCARIBE
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6. (C) In discussions with PolOff, Guy Mayers, the likely
Minister of Commerce if UWP wins the election, and other UWP
leaders all showed disdain for Petrocaribe and the possible
political dependence on Venezuela St. Lucia may develop as a
result. Mayers likened the Petrocaribe scheme to taking out
a 10-year loan to buy groceries. In previous discussions,
senior UWP leader Sir John Compton expressed his concerns
about a deepening St. Lucian-Venezuelan relationship (reftel).

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COMMENT
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7. (C) Although Bousquet emphasized that clinching the
bilateral Petrocaribe agreement and receiving shipments of
what will be presented as "affordable" Venezuelan oil would
not be exploited as an campaign issue, all signs point
otherwise. In numerous conversations, St. Lucia Labour Party
(SLP) officials stressed that their number one campaign
strategy is to showcase all their great accomplishments of
the past nine years, particularly in the areas of
infrastructure, public works, and the economy. "Affordable
oil" could prove to be a powerful puzzle piece next to
universal secondary education and universal health care.


8. (C) Although UWP leaders are not focusing on foreign
relations as a key campaign theme, they are eager to discuss
their concerns over Petrocaribe with any listening ear. It
appears likely that, if elected, UWP leaders would follow
through with their commitment to reject a Petrocaribe
agreement.
GILROY