DISPUTE ENDS BETWEEN MAURITANIA AND WOODSIDE

C O N F I D E N T I A L NOUAKCHOTT 000365 SIPDIS SIPDIS STATE FOR AF/W; AF/EPS (A. ADLER, J. HAENI) EB/ESC/IEC(K. RIOS) E"//BB DD WINSTEAD) 4510/IEP/ANESA/OA/PMICHELINI 6930/ITA/MAS/MFG/OEEI/ABRICKMAN DAKAR FOR RSCO CGRIFFIN E.O. 12958: DECL: 03/30/2016 TAGS: BBSR EINV EPET ECON EFIN MR SUBJECT: DISPUTE ENDS BETWEEN MAURITANIA AND WOODSIDE REF: A. NOUAKCHOTT 00330 ¶B. NOUAKCHOTT 00170 ¶C. NOUAKCHOTT 00111 Classified By: Amb. Joseph LeBaron, Reason 1.4 (b),(d) 1.(U) During separate press conferences on the night of March 30, Colonel Fal and Prime Minister Sidi Mohamed Ould Boubacar formally announced to the country that the dispute with Woodside had ended. A Woodside press release dated March 31 confirms that the two parties "have reached an agreement in principle to settle the dispute." Meanwhile, former Minister of Oil and Energy Zeidane Ould H'meyda, who was charged with fraud relating to the Woodside dispute, was released from jail late last night by he Mauritanian government. ¶2. (U) Boubacar'sstatement wentt into some detail about the agreeent. Woodside will pay Mauritania a USD 100 millio "bonus" 14 days after a new production sharing ontract is signed. Woodside will also pay an addiional USD 1 million a year into an environmentalfund. Finally, Mauritania will also receive agreater share of profit on sale of oil above USD55 per barrel, Boubacar announced. ¶3. (U) In hs speech, Boubacar said that the four production haring contract amendments which the government ha accused the former oil minister of fraudulentlysigning were "suspended and will be cancelled" ater a new contract is signed based on the agreemnt reached. ¶4. (C) Woodside's Corporate AffairsManager Brendan Augustin declined to provide speifics tto Embassy Econ Officer Ghildyal on the agreement other than to confirm Boubacar's announcement. But he said Woodside was not "happy with the amount of disclosure in the Prime Minister's speech." He indicated that there were other parts of the settlement favorable to Woodside which the Prime Minister did not mention, giving the false impression, according to Augustin, that Woodside gave in completely to the government's position. ¶5. (C) Augustin said, however, that Woodside is "happy with the outcome and it gives us a base to continue working and we see this as a genuine agreement," but he added "we are not happy with the way the Mauritanians have handled the entire situation publicly." Woodside's head of operations in Mauritania, John Ozturgut, was outside the country and unavailable for comment. -------------- Comments -------------- ¶6. (C) Embassy will report additional details as they become available. It is unlikely, however, that either side will make available the text of the new agreement. ¶7. (C) This new agreement appears to be a significant win for the Mauritanians. Beyond the USD 100 million "bonus" for the Mauritanians and other benefits, the new agreement will strengthen the broad popular support the junta and transitional government already enjoy throughout much of the country. LeBaron