SIGNS OF IMPROVING IRAQI-KUWAITI RELATIONS

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 000410

SIPDIS

E.O. 12958: DECL: 02/16/2019
TAGS: PBTS PREL MARR MOPS IZ KU IR
SUBJECT: SIGNS OF IMPROVING IRAQI-KUWAITI RELATIONS

REF: A. BAGHDAD 388

B. BAGHDAD 296

C. KUWAIT 125

D. 08 BAGHDAD 2427

Classified By: Senior Advisor Gordon Gray for reasons 1.4 (b) and (d).

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SUMMARY
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1. (C/REL MCFI) In a February 12 meeting with Senior Advisor
Gordon Gray, Deputy Foreign Minister Haj Hamoud detailed his
February 4-5 visit to Kuwait. He said in meetings with
Kuwait's Prime Minister and Foreign Minister, he made
progress on an array of issues, including: how to deal with
shared oil fields; border maintenance; the transfer of Iraqi
farmers residing on the Kuwaiti side of the border; the
Safwan border crossing; and compensation issues. Hamoud said
the Kuwaitis "had no problem with the upcoming survey of the
Khor Abdullah waterway" (KAA). Hamoud said Iraq will pay
$300 million and the Amir of Kuwait $200 million to settle
the Kuwaiti Airways dispute. Kuwaiti Foreign Minister
Mohammed al-Sabbah will see Foreign Minister Zebari at the
Arab League Ministerial in Cairo in March and will plan a
visit to Iraq shortly thereafter.
End summary.

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SHARED OIL FIELDS
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2. (C/REL MCFI) During their February 12 meeting to discuss
the Iraq-Kuwait bilateral relationship, Deputy Foreign
Minister Haj Hamoud told Senior Advisor Gordon Gray that his
February 4-5 visit to Kuwait went well: "everything" was
discussed and he was able to convince the Kuwaitis of many
things. On shared oil fields, Hamoud said the GOI and GOK
agreed to cooperate in the preparation of the fields and that
when fields are ready for exploitation, the two countries
will employ experts to provide suggestions on how to best
share the resource. (Note: This is consistent with Iraqi
Oil Minister Shahristani's remarks to EMIN on February 12 -
ref A.) Within a month, representatives of the two
countries' Ministries of Oil would meet for further
discussions. Hamoud said he deflected efforts by Kuwait to
raise the related topics of exporting gas to Kuwait and the
exploitation of oil in Iraq by Kuwaiti businesses by
demurring that his authority was limited exclusively to the
subject of common fields. Iraq would try to reach a similar
agreement on shared fields with Iran as well.

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LAND BORDER ISSUES
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3. (C/REL MCFI) Regarding the pillars demarcating the border
between the two countries (refs B and D),Hamoud said Iraq
knew it needed to maintain the structures in accordance with
UN Security Council resolutions and that it would do so. As
for the transfer of farmers from the Kuwaiti side of the
border to the Iraqi side, Hamoud said he received
instructions from the Iraqi Foreign Minister to go to Basra
to settle the issue of relocation and compensation of the
farmers with judges there, whom he laughingly described as
less corrupt than government officials in Um Qasr. MFA
engineering expert Ambassador Zayeed would travel to Kuwait
next week to meet with the Kuwaiti Foreign Minister and the
Kuwaiti Fund for Arab Economic Development, to address the
issues of the farmers located on the border and the
long-standing Kuwaiti offer to construct a housing complex
for them.


4. (C/REL MCFI) Hamoud said that Zayeed would also discuss
with the Kuwaitis their offer to construct a new customs
facility on the Iraqi side of the border crossing at Safwan,
and acknowledged that Iraq needed to extend the limited hours
Qand acknowledged that Iraq needed to extend the limited hours
it is open. He said a pre-fabricated building would be
placed on the site while a new facility will be constructed.
Iraq also agreed to the construction of a road that will run
parallel to its border with Kuwait, once a project to clear
mines from the area is completed.

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MARITIME BORDER ISSUES
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BAGHDAD 00000410 002 OF 002



5. (C/REL MCFI) On the subject of the sea border, Hamoud said
there were two distinct areas: the Khor Abdullah waterway
(KAA) and the area approaching the open sea beyond the KAA.
Asked if he raised the issue of the upcoming survey of the
KAA and the waters just beyond it, Hamoud said that he did
and that the Kuwaitis "had no problem with it because it is
in Iraqi water and Iraqi territory." He said that he
explained to the Kuwaitis that an MOU addressing the
wreck-clearing project was still with the five-minister
committee in Baghdad, but that it has been difficult to find
all five ministers in the capital at the same time - for even
five minutes.

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COMPENSATION CLAIMS
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6. (C/REL MCFI) On the subject of compensation for Kuwait,
Hamoud said the two countries need to have a meeting "under
the umbrella of the UN," where they could find "a radical
solution," not just to the amount of outstanding claims but
with an aim toward eliminating the debt entirely.


7. (C/REL MCFI) Hamoud explained that Kuwait was willing to
settle the Kuwait Airways claim of $1.2 or $1.3 billion for
$500 million, while the Iraqis offered $300 million. Hamoud
said the Amir of Kuwait had agreed to pay the difference,
which Foreign Minister Zebari had told us previously. This
settlement, he claimed, "closes all claims regarding the
Kuwaiti Airways planes."

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VISIT TO IRAQ BY KUWAITI FOREIGN MINISTER
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8. (C/REL MCFI) Hamoud said that the Iraqi and Kuwaiti
Foreign Ministers would see each other at the Arab League
Ministerial in Cairo in early March and make plans then for
the Kuwaiti's visit to Iraq shortly thereafter.

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A CAUTIONARY NOTE
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9. (C/REL, MCFI) While Hamoud was enthusiastic about the
apparent breakthroughs on a number of bilateral issues with
Kuwait, many of the matters still require approval or action
from the Prime Minister's office. Hamoud, made plain that
there exists "a kind of war, between the Foreign Minister and
the Prime Minister," which he described as "a personal
rivalry that harms everything." End note.
BUTENIS