PETROCARIBE WILL SELL TO EDH

UNCLAS PORT AU PRINCE 000891 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/CAR WHA/EPSC FOR FAITH CORNEILLE EB/IFD STATE PASS TO USAID FOR LAC/CAR TREASURY FOR JEFFREY LEVINE COMMERCE FOR SCOTT SMITH E.O. 12958: N/A TAGS: ENRG ECON EFIN EINV EAID HA SUBJECT: PETROCARIBE WILL SELL TO EDH REF: A. PAP 846 ¶B. PAP 856 ¶1. This message is sensitive but unclassified: please protect accordingly. ¶2. Michel Guerrier, Director of National, confirmed May 17 the scenario described in reftel A, whereby Haiti's National Electricity Company (Electricite d'Haiti -- EDH) will be designated as Haiti's state-owned oil company and will distribute PetroCaribe oil to retailers. Guerrier also said that because EDH has no experience in buying and selling oil, President Rene Preval has asked Edouard Baussan, the President of the Board of Dynasa, to draw up a contract to manage the oil stock on behalf of EDH. Reportedly, Preval and Baussan are good friends and traveled together to Venezuela in late April to discuss PetroCaribe with Venezuelan President Hugo Chavez. The first ship of 100,000 barrels of PetroCaribe oil, which arrived on May 13, included a donation of 60,000 barrels of diesel to EDH. The remaining 40,000 barrels of unleaded gasoline (20,000 each of 91 and 95) will be sold to the oil companies. Separately, the international oil companies -- Texaco, Esso (a.k.a. Exxon) and Total -- had a shipment of oil arrive May 15. However, they fear that the GOH will insist that they purchase the oil from EDH in the future. ¶3. Comment: Dynasa, which supplies to Haiti's domestic oil company, National, is the only voice in the oil business to endorse Preval's proposal to have EDH control the oil supply. The other international oil companies are increasingly concerned -- both Texaco and Esso will meet with the Ambassador in the near future -- that they will have to buy their oil from the GOH. A corrupt and mismanaged public entity, EDH has failed to provide the country with electricity. We will continue to raise our concerns about the PetroCaribe deal with the highest levels of government, and with Baussan. SANDERSON =======================CABLE ENDS============================