GOH FINALIZING PLANS FOR NABUCCO SUMMIT

C O N F I D E N T I A L SECTION 01 OF 03 BUDAPEST 001188

SIPDIS

DEPARTMENT FOR EUR/FO JGARBER AND MBRYZA, EUR/CE, EUR/RUS,
EUR/ERA, EEB/FO, PLEASE PASS TO NSC ASTERLING

E.O. 12958: DECL: 12/15/2018
TAGS: ENRG ECON EPET PGOV HU
SUBJECT: GOH FINALIZING PLANS FOR NABUCCO SUMMIT

REF: BUDAPEST 1118

Classified By: P/E counselor Eric Gaudiosi, reasons 1.4 (b),(d)


1. (U) SUMMARY: GoH continues to make progress, mainly due
to the efforts of its Special Ambassador for the Nabucco
project, Mihaly Bayer, in organizing the Nabucco Summit it
will host in January. Bayer has already secured numerous
high-profile commitments to attend the Summit, but several
important slots remain to be filled. Chief among them is the
question who will lead the U.S. delegation, which will be an
important signal of our support for the project in particular
and for European energy diversification in general. END
SUMMARY.


2. (U) Hungary's Ambassador to the Nabucco pipeline project,
Mihaly Bayer, held a short briefing at the Ministry of
Foreign Affairs on December 10 to update the diplomatic corps
on progress in preparing for the Nabucco Summit the GoH will
be hosting on January 26-27. Bayer also offered additional
insights on Summit preparations at a December 9 luncheon that
Ambassador Foley hosted for Ambassadors from Nabucco
countries.


3. (U) Bayer outlined the following GoH goals for the
Nabucco Summit:

- to provide a forum where participants could jointly express
their political support for the project and confirm their
readiness to cooperate toward its realization; and,

- to generate discussion on remaining challenges to the
pipeline and concrete proposals to address them.


4. (C) Bayer confirmed that the GoH will propose a "Budapest
Declaration" but is not yet ready to circulate a text. He
noted that the experience with the communique at Baku (see
reftel) had underscored the potential difficulty of reaching
an agreed text and his goal is to distribute a draft for
comment by early January. He also confirmed that the IGA had
been delivered to all governments on December 5 and hoped
that capitals would give it urgent and serious consideration.
The Summit should be the forcing event to come to closure on
the IGA, but he is "realistic" regarding the fact that
"European capitals will be closed for two weeks for Christmas
and New Year's."


5. (U) Following a welcome dinner on January 26, the bulk of
the Summit will take place in two separate sessions on
January 27. During the opening session in the Parliament
building, which will be open to Hungarian Government
representatives, the resident diplomatic corps, and the
press, the heads of each delegation will be invited to make a
brief political statement concerning Nabucco. Afterward, the
delegations will move to a closed session at the Hungarian
Academy of Sciences for an in-depth discussion of the current
state of play and concrete steps needed to move the project
forward.


6. (SBU) According to Bayer, eighteen delegations have been
invited, including the EBRD, the European Investment Bank,
and EU Commissioners Barroso and Solana. He has been making
the rounds to strongly encourage the highest-possible
representation from each invited delegation. According to
his office, invitations were sent in September to Vice
President-elect Biden, Senator Lugar, and Special Envoy Gray.
(Note: Although Senator Lugar had previously been informed
about the Summit by Foreign Minister Goncz during a meeting
earlier this year, his office recently told us they had not
received an invitation. End note.) To date, Bayer has
received the following responses:

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- Azeri President Aliyev has confirmed that he will attend.

- Responses from both the Turkmen and Kazakh leaders are
pending. Bayer will visit Turkmenistan next week to follow
up.

- Iraqi PM Maliki has given indications that he would like to
attend.

- Egypt,s Minister of Petroleum is likely to represent the
GoE

- PM Topolanek may represent the Czech Republic, subject to
press of business arising from the Czech EU Presidency.

- Georgian PM Mgaloblishvili will attend.

- The Bulgarian President, PM, Foreign Minister, or Economic
Minister will represent Sofia.

- Turkish PM Erdogan has indicated that he will try to attend.

- Bayer is hopeful that Austria and Romania will be
represented at their highest levels, but he is awaiting
responses following their recent elections. (Note: Bayer is
less confident regarding Romanian participation. End note.)

- The CEO of the Nabucco International Pipeline Corporation
will attend, and national delegations are welcome to include
energy company representatives.

- Both Barroso and Solana are giving their invitations "very
serious consideration."

- The EBRD President or Vice President will attend.

- The EIB President has confirmed his intention to attend.


7. (SBU) At the Ambassador's "Nabucco lunch" Bayer made the
following comments with respect to countries that are
interested in the Nabucco project, but not invited to the
Summit:

Uzbekistan: He welcomed recent expressions of interest in the
Summit but admitted that he "does not yet understand their
motivations." He referred to the Budapest Summit as being
focused on "long-time partners" with a "demonstrated
interest." He noted that there will be opportunities for
Uzbekistan to attend other events.

Russia: Budapest is "firm" in its decision that there will be
no invitation to Moscow to attend the Summit. Local Russian
diplomats and journalists, however, are welcome to attend the
opening session.

Iran: Bayer indicated some openness to letting "all
contribute as they are able to" in order to "make Nabucco a
success," but ultimately circled back to make clear that
there are "commercial interests" and then there are
"political realities," underscoring that Budapest is
committed to supporting the "EU-American position" that
progress on the nuclear issue must come first. He confided
that Tehran had been in touch to request an invitation to the
Summit. Iranian officials, he thought, had realized that an
invitation to Ahmedinejad would be unlikely and had proposed
sending a delegation of "experts or observers." The GoH had
responded that the Summit has been designed to be a
high-level meeting and the issue was apparently dropped
there. Bayer did offer his personal opinion, however, that
efforts to "isolate" Iran were only leaving it open to

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influence from "Russia, India, and China."


8. (C) COMMENT AND ACTION REQUEST: We are pleased and
encouraged by the GoH's progress to date in organizing a
Summit that could provide Nabucco a much-needed shot in the
arm. We are also concerned, however, that after months of
active diplomacy on the Nabucco issue, there could be a
"U.S.-sized hole" in the Summit's line-up. Accordingly, we
hope that the invitation and the opportunity will be raised
in discussions regarding the transition in order to determine
the appropriate high-level official to lead the U.S.
delegation to the Summit. This summit could mark a critical
juncture for Nabucco and a strong demonstration of our
consistent support for the project can only further enhance
its momentum. END COMMENT.
Foley