Identifier
Created
Classification
Origin
07COLOMBO1439
2007-10-19 05:06:00
CONFIDENTIAL
Embassy Colombo
Cable title:
SRI LANKA: PRESIDENT PLANS VISIT TO IRAN TO
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C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 001439
SIPDIS
SIPDIS
STATE FOR SCA/INS
TREASURY FOR L HULL
MCC FOR D NASSIRY AND E BURKE
E.O. 12958: DECL: 10/18/2012
TAGS: ETRD ENRG PREL KNNP IR CE
SUBJECT: SRI LANKA: PRESIDENT PLANS VISIT TO IRAN TO
PROMOTE TRADE TIES
REF: A. COLOMBO 1307
B. COLOMBO 676
C. COLOMBO 250
Classified By: Ambassador Robert O. Blake, Jr., reasons
1.4 (b) and (d)
C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 001439
SIPDIS
SIPDIS
STATE FOR SCA/INS
TREASURY FOR L HULL
MCC FOR D NASSIRY AND E BURKE
E.O. 12958: DECL: 10/18/2012
TAGS: ETRD ENRG PREL KNNP IR CE
SUBJECT: SRI LANKA: PRESIDENT PLANS VISIT TO IRAN TO
PROMOTE TRADE TIES
REF: A. COLOMBO 1307
B. COLOMBO 676
C. COLOMBO 250
Classified By: Ambassador Robert O. Blake, Jr., reasons
1.4 (b) and (d)
1. (C) Summary: President Rajapaksa plans to make a state
visit to Iran, probably in December. The focus of the visit
will be on trade. Iran is Sri Lanka's sixth largest trading
partner -- it provides half of Sri Lanka's crude oil imports
and is the fourth largest buyer of Sri Lanka's tea. With the
bilateral trade flow nearly ten-to-one in Iran's favor,
Rajapaksa will want to find ways to increase exports to Iran
while seeking renewed Iranian commitments to sell oil at
favorable rates. A recent Iranian expression of interest to
build an oil refinery in Sri Lanka is unlikely to come to
fruition, but may reflect Iranian eagerness to be compensated
for oil it has sold Sri Lanka on credit. We doubt that Sri
Lanka's effort to cultivate ties to Iran will be worth the
possible harm that could come to its already declining
international image. We would welcome any messages the
Department would like us to convey to the government
regarding its ties to Iran, or U.S. objectives there. End
summary.
2. (C) A well-placed minister told Ambassador recently that
Sri Lankan President Rajapaksa plans to make an official
visit to Iran in December, after conclusion of the annual
budget debate in Parliament. The minister said the visit
would focus on trade, including Sri Lankan interest in
increasing tourism from Iran. The minister confirmed recent
local press reports that Iranian President Ahmadinejad
promised Rajapaksa when the two met in September on the
margins of the UN General Assembly that Iran would build an
oil refinery in Sri Lanka. The MFA's director general for
Economic Affairs confirmed to Econoff October 18 the
President's planned visit and its focus on trade.
3. (C) Iran is Sri Lanka's sixth largest trading partner,
with total 2006 exports to Iran worth $83 million and imports
of $759 million. Tea comprised most of the exports to Iran,
which is Sri Lanka's fourth largest buyer. Sri Lanka in 2006
bought from Iran half of its total two million metric tons of
crude oil imports. Sri Lanka's sole oil refinery, run by the
state-owned Ceylon Petroleum Company, is configured to use
Iranian sweet light crude blended with Malaysian crude. CPC
sources told post that Sri Lanka buys Iranian oil at market
prices, but on 45-day credit terms as opposed to the industry
norm of thirty days. An oil industry source told us recently
however that Sri Lanka has been slow to settle credit
purchases with Iran. He speculated that Iran may have
conceived of the idea of building a refinery in Sri Lanka
with terms that would ensure it would be paid for its oil
exports.
4. (SBU) The Sri Lankan mission to the United Nations in
Geneva on October 16 released a statement by Sri Lankan
Ambassador to Tehran Muhammed Zuhair supporting "Iran's
inalienable right to attain peaceful nuclear technology," and
adding, "The ambassador denounced the spread of rumors of a
US attack against Iran and voiced doubt about such a move
adding that Sri Lanka opposed the imposition of new sanctions
against the Islamic Republic."
5. (C) Comment: As reported in refs A and B, the Sri Lankan
COLOMBO 00001439 002 OF 002
Foreign Ministry was slow to issue instructions to the
Central Bank and other ministries on compliance with UN
Security Council Resolutions 1737 and 1747. In this respect,
as in Ambassador Zuhair's statement regarding Iran's right to
pursue peaceful nuclear technology, Sri Lanka appears eager
to maintain good relations with Iran. President Rajapaksa's
visit will continue this approach, and will seek to get more
out of it for Sri Lanka, be it a refinery or favorable prices
on oil. Sri Lanka evidently calculates that such benefits
would be worth the negative international image that close
ties with Iran could engender. We doubt this. The minister
who spoke to Ambassador Blake acknowledged that previous
generous offers from Iran have come to naught. For example,
ref C reported that in February Iran announced it would give
Sri Lanka $500 million in aid, including a $200 million gas
power plant. There has been no public sign since then of the
money or the plant.
6. (C) Post would welcome any messages the Department would
like us to convey to the government regarding its ties to
Iran, or U.S. objectives to stop Iran's nuclear program,
support for terrorism, and anything else the Department
suggest.
BLAKE
SIPDIS
SIPDIS
STATE FOR SCA/INS
TREASURY FOR L HULL
MCC FOR D NASSIRY AND E BURKE
E.O. 12958: DECL: 10/18/2012
TAGS: ETRD ENRG PREL KNNP IR CE
SUBJECT: SRI LANKA: PRESIDENT PLANS VISIT TO IRAN TO
PROMOTE TRADE TIES
REF: A. COLOMBO 1307
B. COLOMBO 676
C. COLOMBO 250
Classified By: Ambassador Robert O. Blake, Jr., reasons
1.4 (b) and (d)
1. (C) Summary: President Rajapaksa plans to make a state
visit to Iran, probably in December. The focus of the visit
will be on trade. Iran is Sri Lanka's sixth largest trading
partner -- it provides half of Sri Lanka's crude oil imports
and is the fourth largest buyer of Sri Lanka's tea. With the
bilateral trade flow nearly ten-to-one in Iran's favor,
Rajapaksa will want to find ways to increase exports to Iran
while seeking renewed Iranian commitments to sell oil at
favorable rates. A recent Iranian expression of interest to
build an oil refinery in Sri Lanka is unlikely to come to
fruition, but may reflect Iranian eagerness to be compensated
for oil it has sold Sri Lanka on credit. We doubt that Sri
Lanka's effort to cultivate ties to Iran will be worth the
possible harm that could come to its already declining
international image. We would welcome any messages the
Department would like us to convey to the government
regarding its ties to Iran, or U.S. objectives there. End
summary.
2. (C) A well-placed minister told Ambassador recently that
Sri Lankan President Rajapaksa plans to make an official
visit to Iran in December, after conclusion of the annual
budget debate in Parliament. The minister said the visit
would focus on trade, including Sri Lankan interest in
increasing tourism from Iran. The minister confirmed recent
local press reports that Iranian President Ahmadinejad
promised Rajapaksa when the two met in September on the
margins of the UN General Assembly that Iran would build an
oil refinery in Sri Lanka. The MFA's director general for
Economic Affairs confirmed to Econoff October 18 the
President's planned visit and its focus on trade.
3. (C) Iran is Sri Lanka's sixth largest trading partner,
with total 2006 exports to Iran worth $83 million and imports
of $759 million. Tea comprised most of the exports to Iran,
which is Sri Lanka's fourth largest buyer. Sri Lanka in 2006
bought from Iran half of its total two million metric tons of
crude oil imports. Sri Lanka's sole oil refinery, run by the
state-owned Ceylon Petroleum Company, is configured to use
Iranian sweet light crude blended with Malaysian crude. CPC
sources told post that Sri Lanka buys Iranian oil at market
prices, but on 45-day credit terms as opposed to the industry
norm of thirty days. An oil industry source told us recently
however that Sri Lanka has been slow to settle credit
purchases with Iran. He speculated that Iran may have
conceived of the idea of building a refinery in Sri Lanka
with terms that would ensure it would be paid for its oil
exports.
4. (SBU) The Sri Lankan mission to the United Nations in
Geneva on October 16 released a statement by Sri Lankan
Ambassador to Tehran Muhammed Zuhair supporting "Iran's
inalienable right to attain peaceful nuclear technology," and
adding, "The ambassador denounced the spread of rumors of a
US attack against Iran and voiced doubt about such a move
adding that Sri Lanka opposed the imposition of new sanctions
against the Islamic Republic."
5. (C) Comment: As reported in refs A and B, the Sri Lankan
COLOMBO 00001439 002 OF 002
Foreign Ministry was slow to issue instructions to the
Central Bank and other ministries on compliance with UN
Security Council Resolutions 1737 and 1747. In this respect,
as in Ambassador Zuhair's statement regarding Iran's right to
pursue peaceful nuclear technology, Sri Lanka appears eager
to maintain good relations with Iran. President Rajapaksa's
visit will continue this approach, and will seek to get more
out of it for Sri Lanka, be it a refinery or favorable prices
on oil. Sri Lanka evidently calculates that such benefits
would be worth the negative international image that close
ties with Iran could engender. We doubt this. The minister
who spoke to Ambassador Blake acknowledged that previous
generous offers from Iran have come to naught. For example,
ref C reported that in February Iran announced it would give
Sri Lanka $500 million in aid, including a $200 million gas
power plant. There has been no public sign since then of the
money or the plant.
6. (C) Post would welcome any messages the Department would
like us to convey to the government regarding its ties to
Iran, or U.S. objectives to stop Iran's nuclear program,
support for terrorism, and anything else the Department
suggest.
BLAKE