KUWAITIS NOT EXPECTING SOMO TO CEASE FUEL IMPORTS

S E C R E T KUWAIT 000137 SIPDIS NOFORN SIPDIS BAGHDAD FOR WEYGANDT AND BOYNTON, NEA/ARP FOR JACKSON AND BAGWELL E.O. 12958: DECL: 01/30/2027 TAGS: ENRG EPET IZ KU SUBJECT: KUWAITIS NOT EXPECTING SOMO TO CEASE FUEL IMPORTS TO IRAQ REF: A. BAGHDAD 00299 ¶B. BAGHDAD 00301 ¶C. TD-314/71099-06 Classified By: Econ Counselor Tim Lenderking for reasons 1.4 (b) and (d ). ¶1. (C/NF) Responding to a report that Iraqi Oil Minister Shahristani had ordered Iraq's State Oil Marketing Organization (SOMO) to cease importing fuel from Kuwait (ref A),Econoff spoke with Jamal Al-Nouri, Director of International Marketing for Kuwait Petroleum Corporation (KPC) on 30 January. Al-Nouri said he was unaware of any Iraqi plans to discontinue fuel imports from Kuwait. On the contrary, he said that KPC and SOMO were in the process of negotiating a renewal of the existing contract for benzene, diesel, and kerosene, which is due to expire in March 2007. ¶2. (SBU) Econoff spoke separately on 30 January with Richard Guy, who has been hired as a consultant by Kuwaiti logistics company PWC-Tristar to assist in the management of Kuwait fuel exports to Iraq. Guy said that PWC-Tristar expects to sign a new contract with SOMO "in the next couple of days" making it the sole contractor responsible for transporting Kuwaiti fuel to Iraq. Guy said that PWC-Tristar would subcontract the work to various trucking companies. (Note: KPC has been telling SOMO for the past two years that it would prefer to deal with a single contractor for all fuel deliveries to Iraq rather than work with a continually changing lineup of trucking companies.) Guy added that trucks filled with Kuwaiti fuel for Iraq continue to sit on the Kuwaiti side of the border due to trucking companies' frustration with nonpayment from SOMO and GOI detention of drivers whom Iraqi officials accuse of siphoning off fuel. ¶3. (S/NF) Shahristani's allegations that Kuwaiti transportation company Rahal has close ties with Salafists and supports the Sunni insurgency (refs A and B) are not substantiated by recent reporting through separate channels (ref C). Such reporting, however, does indicate a possible link between Kuwaiti contractors and Shi'a militia activity. Post also notes that the family name of the owner of Rahal, Mahmoud Boushahri, is Shi'a, making it unlikely that he has close ties with Sunni extremists. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * TUELLER