PROFESSIONAL OIL NEGOTIATOR'S COMMENTS ON ARAB

C O N F I D E N T I A L SECTION 01 OF 02 DOHA 000630

SIPDIS

E.O. 12958: DECL: 09/02/2018
TAGS: ENRG EPET ECON EINV QA
SUBJECT: PROFESSIONAL OIL NEGOTIATOR'S COMMENTS ON ARAB
STATES

REF: A. DOHA 586

B. DOHA 286

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Classified By: Classified By: Amb. Joseph LeBaron, reasons 1.4 (b) and
(d).

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(C) KEY POINTS
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-- The Middle East investment climate varies considerably by
country and successful negotiating strategies must take into
account each local leadership's peculiarities, according to
ConocoPhillips regional president Bill Bullock (see paras.
1-2 below).

-- Qatari officials are tough negotiators but properly
incentivize the energy sector to attract international
investment, and they uphold the sanctity of contracts once
deals are signed.

-- Qatar's energy infrastructure is vulnerable to security
threats, and a well-targeted terrorist attack could take gas
production offline.

-- Qatar Petroleum's (QP) Director of Oil and Gas Ventures
Sa'ad Sherida Al-Ka'abi is a likely candidate to replace the
aging Abdullah Al-Attiyah at the helm of Qatar's energy
sector.

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(C) COMMENTS
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-- Bullock's assessment provides a useful "glass half-full"
contrast to that of ExxonMobil Qatar President Alex Dodds
(see Ref A). While Dodds emphasized the increasingly
difficult terms for foreign companies in Qatar, Bullock --
comparing Qatar to his other regional responsibilities --
noted Qatar's robust respect for contracts and the
predictable business climate which attracts foreign
investment.

-- Al-Ka'abi is universally mentioned by Embassy's energy
sector contacts as one of the rising stars of Qatar
Petroleum. While U.S. minor Anadarko has had negative
experiences with him (Ref B),all indications are that his
star is on the rise and he could very well succeed Al-Attiyah
soon, given the Energy Minister's age and increasing
disinterest in the day-to-day details of the energy business.

END KEY POINTS AND COMMENTS.


1. (C) During an introductory call with Ambassador August 28,
ConocoPhillips (COP) President of Middle East and North
Africa Bill Bullock said Qatar is "a country that gets it
right" in creating an investment climate to encourage
international participation. Bullock -- who oversees COP's
operations in Qatar, Algeria, Libya, the UAE, and Saudi
Arabia, and is a member of the Association of International
Petroleum Negotiators -- said it's hard to generalize about
Arabs' approach to the energy sector as issues are very
country-specific and driven by local leadership.


2. (C) Gulf Arabs in particular have a long history of
trading and are very good negotiators, he said. The Qataris
"fight hard" on negotiations but once contracts are signed
they keep the integrity of terms and maintain a good climate
for contract enforcement; similar favorable conditions exist
in Abu Dhabi. Bullock contrasted COP's positive experience
in Qatar with the "difficult times" in Libya where thecompany has found it a tough place to do business ince their
re-entry there three years ago, in pat because "nothing is
ever nailed down" by the dcision-makers.


3. (C Bullock noted that Energy inister and QP Chairman
Abdullah Al-Attiyah setsa good collaborative tone for work
with foreign irms and establishes fair competition.
Acknowleding that Al-Attiyah is getting old, he remarked
that QP's Director of Oil and Gas Ventures Sa'ad Sherida
Al-Ka'abi is a "very bright, competent manager" who could one
day assume leadership of Qatar's energy sector when
Al-Attiyah passes from the scene through retirement or death.



4. (C) COP's board pursues "classic diversification"
strategies to hedge against geopolitical risk, according to
Bullock. 60-70 percent of the company's asset base is in

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OECD countries and only 5 percent is in the Middle East.
Given their large role in the United States (COP is the
largest domestic gas producer and largest holder of Canadian
oil sands),Bullock said his company "thinks it can afford to
take risks and spread its portfolio out."


5. (C) While the company has not had any security problems in
Qatar, Bullock assessed that if terrorists knew what to hit,
"they could take whole systems down" for natural gas in Ras
Laffan. Specifically, striking the mega-trains' common
utility systems would take gas production offline, at least
temporarily, he said.

LeBaron