US embassy cable - 04AMMAN2780

C O N F I D E N T I A L AMMAN 002780 
 
SIPDIS 
 
PLEASE PASS DOD FOR DEFENSE ENERGY SUPPORT CENTER 
STATE FOR ACIS/MFREEDMAN, PM, NEA/ARN 
 
E.O. 12958: DECL: 04/13/2024 
TAGS: EPET, ETRD, MOPS 
SUBJECT: U.S. COMPANY WINS DEFENSE FUELS CONTRACT LOST BY 
JORDANIAN FIRM: LESSONS LEARNED 
 
 
 1.  (C/NF)  SUMMARY:   The U.S.Firm Trigeant has replaced 
the Jordanian-owned Shahin Group under part of a $71.8 
million contract to supply refined oil products to Iraq for 
the Defense Energy Support Center.  The Shahin Group was 
terminated for cause because it was unable to deliver the 
amount of diesel fuel required under part of its contract. 
The Shahin Group is well-known to the Embassy and the Embassy 
recommends that DESC coordinate with the Embassy on future 
contracts that may involve Jordanian companies.  This could 
also serve as a model for contracting in other areas 
involving companies registered in Jordan.  END SUMMARY. 
 
2.  (C/NF)   On April 3, the Jordanian-owned Shahin Business 
and Investment Group commenced operations under its $71.8 
million Defense Energy Support Center (DESC) contract to 
deliver refined oil products to the Ramadi fuel depot outside 
Baghdad.  It had been the low bidder, winning over two 
American firms.  However, after Shahin demonstrated that it 
was unable to supply the diesel required under part of this 
contract, Shahin was terminated for cause on April 10 for 
that part of the contract.  This development falls into a 
pattern of unmet commitments by Shahin Group.  DESC then 
awarded this part of the contract to Trigeant Ltd., a 
privately-owned oil refining, marketing, distribution, and 
transportation company based in Boca Raton, Florida, which 
had been the original next-lowest bidder.  In the deal, 
Trigeant is partnered with Jordan's National Resources 
Development Company, a state entity involved in developing 
land previously owned by the Jordanian military. 
 
3.  (C/NF)  In order to speed the delivery of the diesel, 
Trigeant arranged a swap with Jordan's Zarqa refinery and 
will bring in further shipments through Aqaba.  The contract 
is for three months with options for renewals of three 
further consecutive three-month periods.   According to 
Trigeant's President, Harry Sargeant, diesel shipments were 
under way by truck from Aqaba by April 12.  All the shipments 
were sent in trucks driven by Iraqi drivers but Sargeant was 
hopeful that Jordanian truckers would soon be competing for 
this business. 
 
4.  (C/NF)  According to reports, Shahin was unable to locate 
the financing needed to fulfill this part of the contract, 
partially because of its lack of standing and the lack of a 
track record in the international oil trading community. 
This development is also consistent with a documented pattern 
of experience with Shahin. 
 
5.  (C/NF)  COMMENT:  The Embassy, both in its Commercial 
Section and elsewhere, is very knowledgeable about Jordanian 
contractors.  As part of its normal support for U.S. 
companies, the Embassy can provide Company Profile Reports on 
companies registered in Jordan.  For future contracts by DESC 
or other agencies or organizations working on supporting USG 
efforts in Iraq, the Embassy strongly recommends an early 
query to the Embassy for Company Profile Reports as well as 
for any other relevant information we can provide. 
GNEHM