Identifier
Created
Classification
Origin
07KUWAIT163
2007-02-04 11:25:00
CONFIDENTIAL//NOFORN
Embassy Kuwait
Cable title:
CHEVRON ADVOCACY LETTER FROM SECRETARY BODMAN;
how-toVZCZCXRO7325 PP RUEHDE RUEHDIR DE RUEHKU #0163 0351125 ZNY CCCCC ZZH P 041125Z FEB 07 FM AMEMBASSY KUWAIT TO RUEHC/SECSTATE WASHDC PRIORITY 8205 INFO RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
C O N F I D E N T I A L KUWAIT 000163
SIPDIS
NOFORN
SIPDIS
STATE FOR EB/ESC/IEC, NEA/ARP, DOE FOR HART
E.O. 12958: DECL: 01/30/2017
TAGS: EPET EINV PREL KU SA OIL SECTOR
SUBJECT: CHEVRON ADVOCACY LETTER FROM SECRETARY BODMAN;
STILL NO ACTION ON DIVIDED ZONE REFINERY
REF: A. BODMAN LTR TO ENERGY MINISTER DTD 11 JAN 2007
B. 06 KUWAIT 4147
Classified By: Charge d'Affaires Matt Tueller for reasons 1.4 (b) and (
d).
C O N F I D E N T I A L KUWAIT 000163
SIPDIS
NOFORN
SIPDIS
STATE FOR EB/ESC/IEC, NEA/ARP, DOE FOR HART
E.O. 12958: DECL: 01/30/2017
TAGS: EPET EINV PREL KU SA OIL SECTOR
SUBJECT: CHEVRON ADVOCACY LETTER FROM SECRETARY BODMAN;
STILL NO ACTION ON DIVIDED ZONE REFINERY
REF: A. BODMAN LTR TO ENERGY MINISTER DTD 11 JAN 2007
B. 06 KUWAIT 4147
Classified By: Charge d'Affaires Matt Tueller for reasons 1.4 (b) and (
d).
1. (C/NF) On 24 January, post faxed a scanned copy of
Energy Secretary Bodman's advocacy letter on behalf of
Chevron (ref A) to Kuwait Energy Minister Shaykh Ali Jarrah
Al-Sabah. Econcouns spoke with the minister's office
director to request that the letter be brought to the
attention of the minister, who was out of the country. Post
also hand-delivered the signed original, once received, to
the minister's office on 31 January where it was received by
Assistant Under Secretary of Energy Dr. Mamdouh Al-Enezi.
Al-Enezi said the letter will immediately be brought to the
minister's attention upon his return from travel on 4
February. Post will report substantive response septel.
Econcouns also informed Bryan Tucker, Assistant to the
President of Saudi Arabian Texaco, that the letter had been
delivered.
2. (C/NF) At present, there seems to be little danger of
Kuwait National Petroleum Company (KNPC) beginning
construction of the proposed refinery next to Saudi Arabian
Texaco's (Chevron's) Divided Zone compound any time in the
next few months. In a 14 January meeting with the Ambassador
(septel),Kuwait Oil Company Chief Executive Farouk Al-Zanki
acknowledged that the refinery project has reached an impasse
and will need to be re-tendered on a different, probably
"cost-plus," basis in order to attract viable bids. Al-Zanki
noted that the proposed site of the refinery remains
controversial.
3. (C/NF) According to local media reports in mid-January,
KNPC refinery project manager Ahmed Al-Jimaz said the tender
for the refinery would have to be reconsidered since the bids
received were too high. He said the project was budgeted at
6.3 billion USD, but the bids came in at approximately 15
billion USD. JP Zacaropoulos, General Manager of
Fluor-Kuwait, which is acting as the ministry's consultant on
the project, told Econoff that the ministry will need to
revise the terms and conditions of the contract, especially
with regard to liability, in order for the qualified
contractors to reduce their bids. On 31 January, KNPC
announced that it was meeting with bidders in London in an
effort to persuade them to reconsider their bids to allow
KNPC to award the contract without re-tendering, a process
which could take an additional four to five months. However,
given the current state of the energy market in the region,
Zacaropoulos considers it unlikely that KNPC will be able to
obtain an affordable bid without re-tendering.
********************************************* *
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
SIPDIS
NOFORN
SIPDIS
STATE FOR EB/ESC/IEC, NEA/ARP, DOE FOR HART
E.O. 12958: DECL: 01/30/2017
TAGS: EPET EINV PREL KU SA OIL SECTOR
SUBJECT: CHEVRON ADVOCACY LETTER FROM SECRETARY BODMAN;
STILL NO ACTION ON DIVIDED ZONE REFINERY
REF: A. BODMAN LTR TO ENERGY MINISTER DTD 11 JAN 2007
B. 06 KUWAIT 4147
Classified By: Charge d'Affaires Matt Tueller for reasons 1.4 (b) and (
d).
1. (C/NF) On 24 January, post faxed a scanned copy of
Energy Secretary Bodman's advocacy letter on behalf of
Chevron (ref A) to Kuwait Energy Minister Shaykh Ali Jarrah
Al-Sabah. Econcouns spoke with the minister's office
director to request that the letter be brought to the
attention of the minister, who was out of the country. Post
also hand-delivered the signed original, once received, to
the minister's office on 31 January where it was received by
Assistant Under Secretary of Energy Dr. Mamdouh Al-Enezi.
Al-Enezi said the letter will immediately be brought to the
minister's attention upon his return from travel on 4
February. Post will report substantive response septel.
Econcouns also informed Bryan Tucker, Assistant to the
President of Saudi Arabian Texaco, that the letter had been
delivered.
2. (C/NF) At present, there seems to be little danger of
Kuwait National Petroleum Company (KNPC) beginning
construction of the proposed refinery next to Saudi Arabian
Texaco's (Chevron's) Divided Zone compound any time in the
next few months. In a 14 January meeting with the Ambassador
(septel),Kuwait Oil Company Chief Executive Farouk Al-Zanki
acknowledged that the refinery project has reached an impasse
and will need to be re-tendered on a different, probably
"cost-plus," basis in order to attract viable bids. Al-Zanki
noted that the proposed site of the refinery remains
controversial.
3. (C/NF) According to local media reports in mid-January,
KNPC refinery project manager Ahmed Al-Jimaz said the tender
for the refinery would have to be reconsidered since the bids
received were too high. He said the project was budgeted at
6.3 billion USD, but the bids came in at approximately 15
billion USD. JP Zacaropoulos, General Manager of
Fluor-Kuwait, which is acting as the ministry's consultant on
the project, told Econoff that the ministry will need to
revise the terms and conditions of the contract, especially
with regard to liability, in order for the qualified
contractors to reduce their bids. On 31 January, KNPC
announced that it was meeting with bidders in London in an
effort to persuade them to reconsider their bids to allow
KNPC to award the contract without re-tendering, a process
which could take an additional four to five months. However,
given the current state of the energy market in the region,
Zacaropoulos considers it unlikely that KNPC will be able to
obtain an affordable bid without re-tendering.
********************************************* *
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