Keep Us Strong WikiLeaks logo

Currently released so far... 5408 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
QA
YM YI YE

Browse by classification

Community resources

courage is contagious

Viewing cable 09TRIPOLI306,

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09TRIPOLI306.
Reference ID Created Released Classification Origin
09TRIPOLI306 2009-04-15 14:02 2011-01-31 21:09 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tripoli
VZCZCXRO0477
RR RUEHGA RUEHTRO
DE RUEHTRO #0306 1051416
ZNR UUUUU ZZH
R 151416Z APR 09
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 4717
INFO RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHGA/AMCONSUL CALGARY 0004
RUEHRB/AMEMBASSY RABAT 0871
RUEHEG/AMEMBASSY CAIRO 1456
RUEHTU/AMEMBASSY TUNIS 0807
RUEHAS/AMEMBASSY ALGIERS 0930
RUEHVT/AMEMBASSY VALLETTA 0414
RUEHTRO/AMEMBASSY TRIPOLI 5246
UNCLAS TRIPOLI 000306 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (REITZA), AND 
CLDP (TEJTEL AND MCMANUS) 
CASABLANCA FOR FCS (ORTIZ) 
AMMAN FOR ESTH HUB (BHALLA) 
CAIRO FOR FINANCIAL ATTACHE (SEVERENS) 
LONDON AND PARIS FOR NEA WATCHER E.O. 12958: N/A TAGS: ECON EINV EPET EFIN ETRD ENRG CA LY

1.(SBU) Summary. On April 12, the President of Canada's Verenex Energy, Jim McFarland, briefed the Ambassador on the difficulties he has encountered in attempting to sell his company to another foreign operator in Libya, the China National Petroleum Company (CNPC). The gist of the problem is that Libya's National Oil Corporation (NOC) has blocked the transaction -- on questionable legal grounds, according to McFarland -- leaving Verenex in a state of limbo. Meanwhile, the NOC has demanded what amounts to a pay-off in the event it permits the transaction to proceed. End of summary.

2.(U) Verenex, a relatively small-scale oil producer that was awarded an exploration block in the Ghadames area five years ago, is one of the few foreign companies that has made successful discoveries in Libya. Verenex's field has estimated reserves of 2.15 billion barrels and is expected to produce 50,000 barrels of oil per day and 50 million cubic feet of gas per day by early 2011.

3.(SBU) In September 2008, Verenex announced a corporate sale, opened confidential technical data of its Libyan assets to 22 companies previously approved by the NOC, and received bids for the sale. After five months, Verenex announced that it had entered into an agreement with the CNPC to acquire Verenex for approx. USD 400 million. The deal, however, was subject to NOC's approval.

4.(SBU) McFarland said that before signing the agreement with CNPC, Verenex was pressured by the NOC to pay the NOC a "bonus" equal to 10% of the value of the transaction with CNPC. NOC assured Verenex that the corporate sale would be quickly approved. But two weeks after Verenex announced the agreement with CNPC, the NOC's chairman, Shukri Ghanem, announced that the NOC might exercise its right of first refusal on the sale of Verenex -- without indicating when it might do so. So far, the NOC has not formally informed Verenex of its intention to acquire the company, but has not approved the deal signed between Verenex and the Chinese either, leaving Verenex in limbo.

5.(SBU) According to McFarland, the NOC's legal basis for halting the deal is questionable. The NOC's pre-emptive right applies to the sale of the company's Libyan assets, not to the entire company, he said. Verenex's strategy is to keep advocating the NOC to approve the agreement signed with CNPC. If, on the other hand, the NOC chooses to proceed with its option to purchase Verenex, it could delay the sale further.

6.(SBU) Comment. Verenex's difficulties underscore the risks foreign companies in all sectors face when doing business in Libya, and with the GOL in particular, where GOL actions can be highly unpredictable and sometimes costly. McFarland agreed that there could be an anti-Chinese angle in the GOL move, but conceded that the chances were slim. End comment. CRETZ