FM SANTOS CLAIMS OIL CONCESSIONS WILL MOVE FORWARD

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000196 SIPDIS SIPDIS DEPT FOR WHA/CEN E.O. 12958: DECL: 01/23/2017 TAGS: PGOV PREL PINR NU SUBJECT: FM SANTOS CLAIMS OIL CONCESSIONS WILL MOVE FORWARD REF: MANAGUA 0179 Classified By: Ambassador Paul Trivelli for reasons 1.4 (b and d) ¶1. (C) Summary: Nicaraguan Foreign Minister Samuel Santos informed us that the government of Nicaragua (GON) will facilitate the opening of oil exploration concessions on the Atlantic Coast that have been stalled for legal reasons. Santos also used the occasion to request assistance for the military and police to combat drug trafficking, and stated that he has no intention to enact sweeping personnel changes at the Foreign Ministry below the Director General level. Santos was not able to provide us with copies of the GON's recent bilateral agreements with Venezuela, Iran, and Taiwan (our second request),claiming that the GON is still "pulling together the details." End Summary. ¶2. (C) Nicaraguan Foreign Minister Samuel Santos requested a meeting with the Ambassador on January 22 to discuss the status of the oil concessions held by American companies MKJ and Infinity off of Nicaragua's Atlantic Coast. He explained that officials from the Foreign and Finance Ministries had met with representatives of the North and South Atlantic Autonomous Regions (RAAN and RAAS) to resolve the issue of a legal stay of action filed by individuals within the RAAN and RAAS to halt the implementation of exploratory activities related to these oil concessions. According to Santos, the RAAN and RAAS are concerned about the effects of oil exploration and development on the fishing industry that employs a large number of breadwinners in rural areas. Atlantic Coast officials assert jurisdiction up to 12 miles offshore; Santos said that the GON considers autonomous jurisdiction to end only three miles out. He assured us that the GON is working to resolve the legal issues and allow the concessions to proceed. ¶3. (C) Note: According to Law 445 (the Law of Communal Property of Ethnic and Indigenous Peoples of the Atlantic Coast Regions) passed in 2003, the RAAN and RAAS have an Economic Empowerment Zone (EEZ) three miles out from the coast line and 25 miles around the islands and keys. Any exploitation of natural resources taking place within the RAAN and the RAAS and their EEZs requires approval by the regional governments. The oil concessions granted to Infinity Petroleum in 2000 were modified in 2003 to 33 miles from the Corn Islands to place them outside of the 25 mile EEZ. End Note. ¶4. (C) Santos commented that the GON is fully committed to combating drug trafficking, but said "we don't have the necessary resources." He specifically mentioned air support (helicopters) for the police and military. Santos commented that head Police Commissioner Aminta Granera has received "serious threats" from international drug cartels resulting from her efforts to interdict drug shipments. He made the point that "we aren't just doing this to help the U.S.," because the GON realizes that Nicaragua has a growing problem with drug addiction. ¶5. (C) When Ambassador asked about Santos plans for Ministry personnel, he replied that he has no program to enact major changes below the Director General level. Santos commented that some of the Directors General will be asked to resign or be transferred from their current positions, and some will stay. (Comment: Ministry contacts are very concerned about their job security and have not been informed about the Minister's intentions. End Comment.) ¶6. (C) We again requested copies of recently signed bilateral cooperation agreements with Venezuela, Iran, and Taiwan (reftel). Santos apologized and explained that the documents are not ready as the GON is still "pulling together the details." He did provide us with a commentary of the "five bottlenecks" (energy, water, cement, education, and health) detailed in reftel. Santos is planning a trip to Taiwan in March, he said, when he will encourage the Taiwanese government and investors to establish more "stable" (read, non-Free Trade Zone) businesses in Nicaragua. He commented that the numerous Taiwanese maquila operations in Nicaragua "could leave at any moment." ¶7. (C) Comment: Similar to previous encounters, the meeting with Santos was cordial and wide-ranging. We predict that we will continue to have extensive access to and cooperation with the Foreign Ministry -- especially if Santos does not enact major changes in the Americas Directorate. He is clearly committed to cooperating with us on a range of issues, however, we are still working to determine how deep this commitment runs in other areas of the new administration. TRIVELLI