PRELIMINARY DISCUSSIONS ON ENERGY COOPERATION

C O N F I D E N T I A L STATE 099343

SIPDIS

E.O. 12958: DECL: 09/24/2019
TAGS: ECON ENIV ENRG EPET VE
SUBJECT: PRELIMINARY DISCUSSIONS ON ENERGY COOPERATION
WITH VENEZUELA

REF: A. CARACAS 860

B. STATE 67032

Classified By: WHA/FO Christopher J. McMullen for E.O. 12958,
Reason 1.4 (d).


1. (C) This is an action cable - see para 7.


2. (C) Representatives of the Venezuelan government (GBRV) in
recent weeks have reached out to USG officials in Caracas and
Washington on several occasions about resuming a bilateral
energy dialogue, including under the auspices of the 1997
Memorandum of Understanding (MOU) between the U.S. Department
of Energy (DOE) and the Venezuelan Ministry of Energy and
Petroleum. While that 10-year MOU has expired, we are
willing to consider discussions with Venezuela on these
important matters.

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MEETING WITH VENEZUELA ENERGY ATTACH
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3. (C) In a July 22 meeting with EEB, WHA, and DOE officers
at the Department, the Venezuelan Embassy energy attach
stated his government had resumed its full participation in
the Energy Council, after paying its back dues. (The Energy
Council is an Oklahoma-based coalition that includes state
legislators from U.S. and Canadian energy producing states
and provinces and Venezuela.) The Venezuelan attach
indicated Ambassador Alvarez and PDVSA Director Fadi Kabboul
will participate in the Council's annual meeting in Wichita,
Kansas, on September 24-25. We acknowledged the GBRV's
reengagement in the Council, while underscoring that to most
effectively advance bilateral energy dialogue, PDVSA and the
GBRV needed to engage directly with Embassy officers,
including the Ambassador, in Caracas.


4. (C) The energy attach also conveyed an invitation for USG
representation at the World Heavy Oil Congress, to be held in
Puerto La Cruz in November. The Department has no objection
to sending an Embassy representation at whatever level the
Embassy judges best. Such participation could be seen as
consistent with Ambassador Alvarez's participation in the
Energy Council's annual meeting. Should the Embassy
participate, Energy Council Chairman Mike Hill, who will lead
a delegation to Puerto La Cruz, would be pleased to
coordinate with the Embassy.


5. (U) As post is aware, the Department and the DOE co-lead
the Energy and Climate Partnership of the Americas (EPCA)
(ref b). We encourage nations in the Western Hemisphere to
lead or participate in initiatives that support cooperation
in the five section areas. Embassy can take this opportunity
to raise EPCA with the Venezuelans, with a view to
encouraging their participation.


6. (C) Despite difficulties in our overall bilateral
relationship, for five years we have sought to engage the
GBRV constructively on energy issues. The Venezuelan energy
attach's approach and the Ambassador's return to post
represent an opportunity to make progress on this account,
including by suggesting the specific engagement activities
noted below. The ball, however, should be in the
Venezuelans' court to respond.

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PRELIMINARY DISCUSSIONS
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7. (U) Action requested - that the Ambassador meet with
appropriate Venezuelan officials to ascertain more about the
GBRV's recent outreach on energy cooperation, including its
seriousness overall and the level and type of discussion that
it wants. You can solicit views on which elements of the
1997 MOU, which expired in 2007, are of particular interest
to the Venezuelans. You can note that, assuming we have a
clear indication of GBRV interest in any discussions, there
is a possibility of general exchanges of views on:

-- global energy markets, including U.S. and Venezuelan
forecasts;

-- bilateral energy trade and investment issues, including
concerns of U.S. investors; and

-- government actions to promote energy efficiency and
conservation within the energy sector.

You should point out that heavy oil research and development
work - which the GBRV had identified as a possible area of
discussion - is no longer a budgetary priority of the USG.

Based on your discussions and recommendations, the Department
will discuss within the interagency what next steps are in
order, including formal or ad hoc engagement with the GBRV on
energy issues.
CLINTON