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