SARKOZY INTENDS TO OFFER SAUDI ARABIA PEACEFUL

S E C R E T RIYADH 000037 SIPDIS SIPDIS WHITE HOUSE FOR SPENCER GEISSINGER AND MELISSA BENNETT, NSC FOR ELLIOT ABRAMS, NICK RAMCHAND, STATE FOR NEA/AS DAVID WELCH AND DAS GORDON GRAY, E.O. 12958: DECL: 01/06/2018 TAGS: OVIP PREL PINR FR SA SUBJECT: SARKOZY INTENDS TO OFFER SAUDI ARABIA PEACEFUL NUCLEAR TECHNOLOGY REF: 07 RIYADH 02454 Classified By: Deputy Chief of Mission Michael Gfoeller for reasons 1.4 (b) and (d). ¶1. (S/NF) SUMMARY. French President Nicholas Sarkozy will arrive in Saudi Arabia January 15 and depart the next day. French Embassy contacts have confirmed that Sarkozy will discuss the transfer of peaceful nuclear technology to Saudi Arabia and may present a formal offer to be signed during the visit. Post suggests that the USG considers discussing a Peaceful Nuclear Partnership agreement with the highest levels of the Saudi government at the earliest possible date. END SUMMARY. ¶2. (S/NF) French President Nicholas Sarkozy will arrive in Riyadh at 1600 January 13, overnight and depart at 1430 January 14. Sarkozy is scheduled to meet and dine with Saudi King Abdullah bin Abdulaziz Al Saud, overnight in the King's Palace, address the Shura Council, meet with the French business community, and lunch with Crown Prince Sultan bin Abdulaziz Al Saud. Contacts in the French Embassy report that Sarkozy will focus on ways to counter Iran's regional threat, including the offer of nuclear technology and equipment to Saudi Arabia. This offer is intended to demonstrate that nuclear technology is available for peaceful purposes without an independent nuclear development program. ¶3. (S/NF) French Embassy contracts confirm that other agenda items include various "educational, cultural and commercial issues", but Iran and nuclear power will be the main issues for Sarkozy. We fully expect that Sarkozy will advocate for French commercial interests. These include: 20 billion dollars worth of border protection programs, Saudi Airline's widebody aircraft purchase valued at between 7 and 15 billion dollars and the 13 billion dollar Saudi Naval Expansion Program (SNEP II). In each instances French firms are competing against one or more American firms, including Raytheon, Boeing, Lockheed Martin and General Dynamics. 4.(U) Post welcomes any information Embassy Paris could provide regarding Sarkozy's agenda in Saudi Arabia. ¶5. (S/NF) Comment. The French have already agreed to assist Libya with their nuclear power program. The Saudis see considerable economic logic is saving oil for export while producing electricity with nuclear power. As noted in reftel para 15, post believes that maximum US influence and control over any Saudi nuclear program can be obtained through the negotiation of a Peaceful Nuclear Partnership (PNP) agreement similar to that recently signed with Jordan. ¶6. (S/NF) The announcement of Saudi French nuclear cooperation would not reduce the value of our own PNP agreement. If the Saudis do decide to build nuclear power plants, they will no doubt build more than one of them. International cooperation in the nuclear power field could well end up divided like that given to the Saudi Navy where the Americans equip and support the Persian Gulf Fleet while the French do the same for the Red Sea Fleet. Moreover the prospects of American firms, such as GE or Westinghouse, bidding on Saudi nuclear power projects would be increased by a PNP agreement. End Comment FRAKER