COLOM SAYS PETROCARIBE NEGOTIATIONS AT "IMPASSE"

C O N F I D E N T I A L GUATEMALA 000600 SIPDIS E.O. 12958: DECL: 05/09/2018 TAGS: PREL ENRG ECON VZ GT SUBJECT: COLOM SAYS PETROCARIBE NEGOTIATIONS AT "IMPASSE" REF: A. GUATEMALA 288 ¶B. GUATEMALA 178 CLASSIFIED BY: Ambassador James M. Derham for reasons 1.4 (B&D). ¶1. (U) President Alvaro Colom told press May 8 that the GOG's discussions with the Government of Venezuela about a PetroCaribe deal are at an "impasse." "We do not want to get into the fuels business; that's not a government function," Colom reportedly told journalists. Colom also dismissed the possibility that he would raise PetroCaribe with President Chavez later this month in Peru, where the two are scheduled to attend the EU-Latin American Summit. Press also qote Minister of Energy and Mines Carlos Meany assaying that Venezuela has not been forthcoming wth concrete data on pricing and deliveries that would allow the GOG to make a decision. ¶2. (C) Comment: President Colom's latest comments are in contrast to his previous, positive statements on PetroCaribe membership. A recurring theme in Embassy conversations with senior GOG officials participating in the PetroCaribe negotiations has been the discrepancy in GOG and GOV interests: the Venezuelans have reportedly prioritized the political gesture of signing a deal (and working out the details later),whereas the GOG has prioritized nailing down agreement on pricing and delivery schedules (refs a and b). The GOG has remained uncomfortable with the Venezuelan recommendation that it establish a state oil company. Embassy officers have repeatedly urged the GOG to weigh carefully the pros and cons of a PetroCaribe deal, and suggested that the MFA ask current PetroCaribe members about their experiences with Venezuelan compliance with the terms of agreements. The influential private sector and some media have also urged the GOG not to sign. DERHAM