Identifier | Created | Classification | Origin |
---|---|---|---|
06TEGUCIGALPA1747 | 2006-09-18 16:27:00 | CONFIDENTIAL | Embassy Tegucigalpa |
VZCZCXRO6322 OO RUEHLMC DE RUEHTG #1747/01 2611627 ZNY CCCCC ZZH O 181627Z SEP 06 FM AMEMBASSY TEGUCIGALPA TO RUEHC/SECSTATE WASHDC IMMEDIATE 3431 INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY RUEHCV/AMEMBASSY CARACAS PRIORITY 0436 RUEHMU/AMEMBASSY MANAGUA PRIORITY 2507 RUEHME/AMEMBASSY MEXICO PRIORITY 6785 RUEHSN/AMEMBASSY SAN SALVADOR PRIORITY 1063 RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY RUEAIIA/CIA WASHDC PRIORITY RHEHNSC/NSC WASHDC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC PRIORITY 0466 |
C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 001747 |
1. (C) Summary: A recent meeting in San Salvador has detailed a potential deal involving Venezuelan fuel that may be used to influence upcoming elections. The deal involves oil trading company Trafigura Beheer SV, which has links to Venezuelan fuel company PDVSA and has been in serious negotiations to buy Honduran fuel retailer DIPPSA. Trafigura and PDVSA may be utilizing a PetroCaribe type arrangement to provide discounted fuel to a Salvadoran political party, which could be a blueprint for similar deals in Honduras and Nicaragua. End Summary. 2. (C) Per ref (a), the Chavez government in Venezuela is attempting to influence future elections in El Salvador by selling discounted fuel through an agreement with Trafigura Beheer SV, a global trading company that has a strong presence in Latin American through subsidiaries Puma Energy and COPENSA. The scheme apparently is to sell the fuel to Salvadoran political party FMLN at a discounted price, then allow them to sell the fuel at regular price through PUMA facilities, pocketing the difference for upcoming elections. (Comment: Several FMLN mayors have signed up for a Venezuelan fuel deal called PetroCaribe, which allows them to finance 40 percent of the purchase at 1-2 percent over 23 years. The deal requires a government to government agreement, normally between Venezuelan fuel company PDVSA and the host government. Working a PetroCaribe type deal through an intermediary like Trafigura would be a new arrangement, but not unexpected. End Comment). 3. (C) Trafigura continues to play a prominent role in the Honduran national fuel bid and the potential purchase of Honduran fuel retailer DIPPSA (ref b). The national bid, which would seek one supplier for each type of fuel, is due to be sent to potential bidders within 15 days. DIPPSA owns key strategic storage and distribution facilities on both coasts, with easy access to both El Salvador and Nicaragua, where similar PetroCaribe agreements have been signed. Owner Henry Arevalo has been in advanced talks with Trafigura about a potential sale of 50 percent of DIPPSA, and has publically stated that he plans on winning the national bid. 4. (C) Headquartered in Holland, with principle trading offices in Switzerland, Trafigura has over 55 trading offices in 36 countries, and specializes in the transport, storage and retail of petroleum products. In Central America, Trafigura owns considerable storage facilities in Guatemala (through COPENSA), and a growing network of PUMA brand retail gasoline stations throughout Guatemala, El Salvador, and Honduras. Combined with DIPPSA, the company would have in Honduras over 130 gas stations, strategically placed storage facilities, and a truck fleet. 5. (C) Trafigura,s owner, Wilmer Ruperti Perdomo, is rumored to have close connections with Venezuelan President Hugo Chavez, and played a key role helping Chavez survive the potentially devastating oil strikes in 2002 and 2003. In 2005, press reports indicated that PDVSA was double billed by Trafigura for a fuel shipment valued at USD 14 million, but an ensuing investigation by PDVSA was inconclusive (Comment: The implication was that Chavez was rewarding his confidant. End Comment). Trafigura, founded in 1993 by former employees of Marc Rich,s oil trading company Glencore, was also implicated in the 2001 UN oil- for-food scandal. 6. (C) In what Post originally assumed to be a separate negotiation, Argentine/French businessman Adrien Reca Salaburu continues to boast of an impending deal with Arevalo for all of DIPPSA, with an offer valued at USD 71 million (ref c). Reca has openly declared that he will source his fuel from PDVSA, and was recently in the Dominican Republic TEGUCIGALP 00001747 002 OF 002 where he is rumored to have bid on fuel giant Shell,s assets. While Arevalo continues to scoff at any offers from Reca, the flow of detailed information from the Reca camp may indicate that a deal is actually in the works, and may be related to the Trafigura negotiations. (Comment: The recent Salvadoran agreement with Trafigura confirms rumors that they will also source their fuel from PDVSA. Contacts in the Reca camp have indicated that they are, or have made, deals in El Salvador for distribution, and Reca himself described to EconOffs his vision for a sweeping Central American strategy. The 50 percent deal with Trafigura, however, does seems to differ from Reca's stated desire to buy DIPPSA outright, and Arevalo,s reluctance to deal with Reca seems genuine. That said, with the common thread being PDVSA, Reca may in fact be working behind the scenes with Trafigura. End Comment). 7. (C) Comment. Official and unofficial channels with the GOH have repeatedly indicated that they want to do a deal involving PDVSA and PetroCaribe, but on &commercial terms.8 An intermediary with considerable Central American reach like Trafigura seems likely to fill that role. At a minimum, the Salvadoran deal, if true, seems like a natural to extend to the Nicaraguan market, where PDVSA has signed similar agreements. A larger deal within Honduras would nicely tie together the three markets with strategically located storage and retail facilities. If a PetroCaribe financing scheme is involved, the network could have repercussions on national elections for years to come. End Comment. FORD |