Identifier
Created
Classification
Origin
09ABUDHABI856
2009-08-30 13:03:00
CONFIDENTIAL//NOFORN
Embassy Abu Dhabi
Cable title:
UAE ENERGY POLITICS -- OIL FOR SECURITY?
how-toVZCZCXRO4440 OO RUEHBC RUEHDE RUEHDH RUEHDIR RUEHKUK RUEHTRO DE RUEHAD #0856 2421303 ZNY CCCCC ZZH O 301303Z AUG 09 FM AMEMBASSY ABU DHABI TO RUEHC/SECSTATE WASHDC IMMEDIATE 2876 INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE RUCNIRA/IRAN COLLECTIVE RUEHMO/AMEMBASSY MOSCOW 0490 RUEHBJ/AMEMBASSY BEIJING 0273 RUEHKO/AMEMBASSY TOKYO 0321 RHEHNSC/NSC WASHDC RUCNDT/USMISSION USUN NEW YORK 0250
C O N F I D E N T I A L ABU DHABI 000856
NOFORN
SIPDIS
E.O. 12958: 08/29/2019
TAGS: ENRG EPET ETRD PGOV IR RS AE
SUBJECT: UAE ENERGY POLITICS -- OIL FOR SECURITY?
CLASSIFIED BY AMBASSADOR RICHARD G. OLSON FOR REASONS 1.4 B AND D.
C O N F I D E N T I A L ABU DHABI 000856
NOFORN
SIPDIS
E.O. 12958: 08/29/2019
TAGS: ENRG EPET ETRD PGOV IR RS AE
SUBJECT: UAE ENERGY POLITICS -- OIL FOR SECURITY?
CLASSIFIED BY AMBASSADOR RICHARD G. OLSON FOR REASONS 1.4 B AND D.
1. (C/NF) SUMMARY: According to a senior energy official, recent oil
storage deals between the Abu Dhabi National Oil Company and China
and Japan were completed for "political" reasons at the instruction
of Abu Dhabi Crown Prince Mohammed bin Zayed (MbZ). While the deals
may have simply been visit deliverables, given MbZ's preoccupation
with the Iranian threat, a similar deal between Abu Dhabi's TAQA and
Russia's Gazprom suggests MbZ may be offering energy deals to garner
P5 support on Iran. END SUMMARY.
2. (C) On August 14, the Abu Dhabi National Oil Company (ADNOC)
signed an MOU with the China National Petroleum Corporation to
cooperate in crude oil storage. The MOU was signed in conjunction
with the visit of Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan
(MbZ) to China. ADNOC Deputy CEO Abdulla Nasser Al Suwaidi (strictly
protect) told EconOff on August 25 that the MOU was a purely
political gesture taken at the instruction of MbZ. As the MOU is
nonbinding and lacks specifics, Al Suwaidi said ADNOC had little to
gain from the deal. However, he noted that ADNOC may be able to use
the MOU to its advantage in business with other Chinese companies.
3. (C) Al Suwaidi laughingly compared the China MOU to a similar
strategic reserve storage agreement he signed, on behalf of Abu
Dhabi's Supreme Petroleum Council, with Japan in June. He said that
deal was for one million barrels of oil storage; only a fraction of
Japan's daily consumption. To demonstrate the noncommercial nature
of the deal, Al Suwaidi added that no one considered the tax
implications of the deal. Before signing, he had to clarify that
ADNOC crude storage would not be subject to domestic Japanese energy
taxes, which exceed 40 percent.
4. (C) Separately, the Abu Dhabi National Energy Company (TAQA)
finalized a gas storage deal in the Netherlands with Gazprom on
August 22, following a December 2008 MOU. TAQA, a government-owned
corporation, has many purely commercial deals, but could also have
been directed to seek out Gazprom.
5. (C/NF) COMMENT: MbZ is known to instruct state-owned firms to look
to particular markets for political reasons. In 2008, he asked key
Abu Dhabi companies to explore business in Iraq, for example. Given
his deep-seated concerns about Iranian hegemony, it may be MbZ may be
using oil to bind UAE interests to those of key Security Council
members. COMMENT.
OLSON
NOFORN
SIPDIS
E.O. 12958: 08/29/2019
TAGS: ENRG EPET ETRD PGOV IR RS AE
SUBJECT: UAE ENERGY POLITICS -- OIL FOR SECURITY?
CLASSIFIED BY AMBASSADOR RICHARD G. OLSON FOR REASONS 1.4 B AND D.
1. (C/NF) SUMMARY: According to a senior energy official, recent oil
storage deals between the Abu Dhabi National Oil Company and China
and Japan were completed for "political" reasons at the instruction
of Abu Dhabi Crown Prince Mohammed bin Zayed (MbZ). While the deals
may have simply been visit deliverables, given MbZ's preoccupation
with the Iranian threat, a similar deal between Abu Dhabi's TAQA and
Russia's Gazprom suggests MbZ may be offering energy deals to garner
P5 support on Iran. END SUMMARY.
2. (C) On August 14, the Abu Dhabi National Oil Company (ADNOC)
signed an MOU with the China National Petroleum Corporation to
cooperate in crude oil storage. The MOU was signed in conjunction
with the visit of Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan
(MbZ) to China. ADNOC Deputy CEO Abdulla Nasser Al Suwaidi (strictly
protect) told EconOff on August 25 that the MOU was a purely
political gesture taken at the instruction of MbZ. As the MOU is
nonbinding and lacks specifics, Al Suwaidi said ADNOC had little to
gain from the deal. However, he noted that ADNOC may be able to use
the MOU to its advantage in business with other Chinese companies.
3. (C) Al Suwaidi laughingly compared the China MOU to a similar
strategic reserve storage agreement he signed, on behalf of Abu
Dhabi's Supreme Petroleum Council, with Japan in June. He said that
deal was for one million barrels of oil storage; only a fraction of
Japan's daily consumption. To demonstrate the noncommercial nature
of the deal, Al Suwaidi added that no one considered the tax
implications of the deal. Before signing, he had to clarify that
ADNOC crude storage would not be subject to domestic Japanese energy
taxes, which exceed 40 percent.
4. (C) Separately, the Abu Dhabi National Energy Company (TAQA)
finalized a gas storage deal in the Netherlands with Gazprom on
August 22, following a December 2008 MOU. TAQA, a government-owned
corporation, has many purely commercial deals, but could also have
been directed to seek out Gazprom.
5. (C/NF) COMMENT: MbZ is known to instruct state-owned firms to look
to particular markets for political reasons. In 2008, he asked key
Abu Dhabi companies to explore business in Iraq, for example. Given
his deep-seated concerns about Iranian hegemony, it may be MbZ may be
using oil to bind UAE interests to those of key Security Council
members. COMMENT.
OLSON