HAITI: PETROCARIBE UPDATE: RATIFICATION IN THE

UNCLAS PORT AU PRINCE 001598

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/CAR
WHA/EPSC FOR FAITH CORNEILLE, ED MARTINEZ
EB/IFD
STATE PASS TO USAID FOR LAC/CAR
TREASURY FOR JEFFERY LEVINE
COMMERCE FOR SCOTT SMITH

E.O. 12958: N/A
TAGS: ENRG EPET ECON EAID HA
SUBJECT: HAITI: PETROCARIBE UPDATE: RATIFICATION IN THE
WORKS

REF: PAP 1377


1. This message is sensitive but unclassified: please
protect accordingly.


2. (U) The PetroCaribe agreement is in parliament awaiting
ratification. For several days, the parliamentarians have
asked for more time to analyze the document before finalizing
their report. By all accounts, the parliamentarians will
ratify the agreement because of the seemingly huge benefit to
Haiti. The delay in ratification underscores the lack of
understanding about the PetroCaribe agreement, which post has
experienced in many conversations with GOH officials
regarding PetroCaribe. The decision on ratification is
currently scheduled to take place on August 28.


3. (SBU) Meanwhile, Public Works Minister Frantz Verella
confirmed the arrival of a Venezuelan shipment of 10,000
barrels of asphalt. The GOH is having the same problems with
the asphalt that they had with first shipment of petroleum:
they are not sure how to transport the asphalt to its final
destination and have no place for its storage. A second
petroleum shipment is not yet on the horizon, and presumably,
the same problems of transportation, storage and distribution
will persist. (Note: The GOH designated Haiti's national
electricity company (Electricite d'Haiti -- EDH) as the
state-owned oil company to meet PetroCaribe requirements, but
asked Dynasa, the domestic fuel company, to manage and
control the fuel on behalf of EDH. End note.) Per ref, in
early August the GOH finally sold the first Venezuelan
shipment of 100,000 barrels of fuel, which arrived May 14 for
President Rene Preval's inauguration. The GOH sold half of
the shipment to Dynasa and half to Total, the French fuel
company with which the GOH has a close relationship. At
least part of the shipment was initially intended as a
donation to EDH. XXXXXXXXXXXX (please protect),an
industry expert and employee of Dynasa, told Econoff August
25 that it is no surprise that the GOH sold the fuel instead
of using it to power the electricity plants, which have not
operated since mid-June due to a lack of funds to buy fuel.


4. (SBU) Comment: As post has stressed in past cables,
according to GOH officials, PetroCaribe is simply too good an
opportunity to miss. Though the GOH knows that
implementation will be difficult due to the agreement's
stringent requirements, PetroCaribe provides easy access to
extra cash. Local press reports have been almost silent
until this week, when one radio station noted that since the
initial shipment in May, the government has not publicly
discussed the agreement. The same report also observed that
many Caribbean countries have signed the agreement but have
not received a drop of petroleum. End comment.
TIGHE

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