Identifier
Created
Classification
Origin
09CARACAS981
2009-07-28 20:28:00
CONFIDENTIAL
Embassy Caracas
Cable title:
SMALL U.S. INVESTMENT IN ELECTRICITY GENERATION
how-toVZCZCXRO8626 PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC DE RUEHCV #0981 2092028 ZNY CCCCC ZZH P 282028Z JUL 09 FM AMEMBASSY CARACAS TO RUEHC/SECSTATE WASHDC PRIORITY 3462 INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS RHEBAAA/DEPT OF ENERGY RHEHNSC/NSC WASHDC RUMIAAA/HQ USSOUTHCOM MIAMI FL RUCPDOC/DEPT OF COMMERCE RUEATRS/DEPT OF TREASURY
C O N F I D E N T I A L CARACAS 000981
SIPDIS
ENERGY FOR CDAY AND ALOCKWOOD
HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR MKACZMAREK
NSC FOR RKING
USDOC FOR 4332 MAC/ITA/WH/JLAO
E.O. 12958: DECL: 07/29/2019
TAGS: ECON EINV ENRG VE
SUBJECT: SMALL U.S. INVESTMENT IN ELECTRICITY GENERATION
REMAINS IN LIMBO
REF: A. 2007 CARACAS 59
B. CARACAS 592
Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b)
and (d).
C O N F I D E N T I A L CARACAS 000981
SIPDIS
ENERGY FOR CDAY AND ALOCKWOOD
HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR MKACZMAREK
NSC FOR RKING
USDOC FOR 4332 MAC/ITA/WH/JLAO
E.O. 12958: DECL: 07/29/2019
TAGS: ECON EINV ENRG VE
SUBJECT: SMALL U.S. INVESTMENT IN ELECTRICITY GENERATION
REMAINS IN LIMBO
REF: A. 2007 CARACAS 59
B. CARACAS 592
Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b)
and (d).
1. (C) Acting through its European subsidiary, PSEG Global
LLC, a New Jersey-based company, sent Rafael Ramirez,
Minister of Energy and Petroleum (MEP),a letter July 22
requesting the reinitiation of negotiations over the GBRV's
intended nationalization of Turboven, a group of companies
with a small investment in electricity generation in which
PSEG Global has a 50 percent stake. In this letter, PSEG
noted its acceptance of the jurisdiction of the International
Centre for Settlement of Disputes (ICSID) pursuant to the
bilateral investment treaty between Venezuela and the
Netherlands. Nelson Garcez (strictly protect throughout),
Managing Director of PSEG Europe, explained to Econoff July
27 that PSEG wished to keep the option of filing for
arbitration open but hoped to resolve the issue through
negotiations.
2. (C) Turboven has a generating capacity of 120 MW and
mainly supplies manufacturing companies located in several
industrial parks in Aragua state. President Chavez and the
GBRV included Turboven's operations in the 2007 announcement
of intent to nationalize private companies in the electricity
sector (ref A). Turboven and PSEG subsequently entered into
negotiations with MEP for the acquisition of Turboven by
PDVSA, but these negotiations were suspended in early 2008.
According to Garcez, Turboven and PSEG have been seeking to
reinitiate negotiations for several months but have received
contradictory signals and cannot find people at the right
level with whom to talk. PSEG is eager to complete a deal,
as it does not want to invest further in Turboven and as
Turboven is not being paid in full for the electricity it is
supplying to CADAFE, a state electricity company.
3. (SBU) Comment: Turboven's situation is similar, but not
identical, to the situation many recently nationalized
oilfield services companies found themselves in (ref B).
Whereas PDVSA has taken over the operations of the latter
companies, Turboven continues to operate as a private
company. As with the oilfield services companies, Turboven
is seeking clarification as to its legal status (given the
nationalization announcement),is having trouble finding a
negotiating partner within MEP (or PDVSA),and is unable to
collect full payment from the state-owned company which is
one of its clients. End comment.
CAULFIELD
SIPDIS
ENERGY FOR CDAY AND ALOCKWOOD
HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR MKACZMAREK
NSC FOR RKING
USDOC FOR 4332 MAC/ITA/WH/JLAO
E.O. 12958: DECL: 07/29/2019
TAGS: ECON EINV ENRG VE
SUBJECT: SMALL U.S. INVESTMENT IN ELECTRICITY GENERATION
REMAINS IN LIMBO
REF: A. 2007 CARACAS 59
B. CARACAS 592
Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b)
and (d).
1. (C) Acting through its European subsidiary, PSEG Global
LLC, a New Jersey-based company, sent Rafael Ramirez,
Minister of Energy and Petroleum (MEP),a letter July 22
requesting the reinitiation of negotiations over the GBRV's
intended nationalization of Turboven, a group of companies
with a small investment in electricity generation in which
PSEG Global has a 50 percent stake. In this letter, PSEG
noted its acceptance of the jurisdiction of the International
Centre for Settlement of Disputes (ICSID) pursuant to the
bilateral investment treaty between Venezuela and the
Netherlands. Nelson Garcez (strictly protect throughout),
Managing Director of PSEG Europe, explained to Econoff July
27 that PSEG wished to keep the option of filing for
arbitration open but hoped to resolve the issue through
negotiations.
2. (C) Turboven has a generating capacity of 120 MW and
mainly supplies manufacturing companies located in several
industrial parks in Aragua state. President Chavez and the
GBRV included Turboven's operations in the 2007 announcement
of intent to nationalize private companies in the electricity
sector (ref A). Turboven and PSEG subsequently entered into
negotiations with MEP for the acquisition of Turboven by
PDVSA, but these negotiations were suspended in early 2008.
According to Garcez, Turboven and PSEG have been seeking to
reinitiate negotiations for several months but have received
contradictory signals and cannot find people at the right
level with whom to talk. PSEG is eager to complete a deal,
as it does not want to invest further in Turboven and as
Turboven is not being paid in full for the electricity it is
supplying to CADAFE, a state electricity company.
3. (SBU) Comment: Turboven's situation is similar, but not
identical, to the situation many recently nationalized
oilfield services companies found themselves in (ref B).
Whereas PDVSA has taken over the operations of the latter
companies, Turboven continues to operate as a private
company. As with the oilfield services companies, Turboven
is seeking clarification as to its legal status (given the
nationalization announcement),is having trouble finding a
negotiating partner within MEP (or PDVSA),and is unable to
collect full payment from the state-owned company which is
one of its clients. End comment.
CAULFIELD