US embassy cable - 04DJIBOUTI731

UNCLAS SECTION 01 OF 02 DJIBOUTI 000731 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF AND AF/E; STATE ALSO FOR AF/EPS; 
LONDON AND PARIS FOR AFRICA WATCHERS 
 
E.O. 12958: N/A 
TAGS: EPET, PREL, PGOV, ECON, DJ 
SUBJECT: EXXON-MOBIL REPRESENTATIVE BRIEFS ON NEXT STEPS 
WITH DJIBOUTI 
 
REF: A. A) ADDIS ABABA 1637 
 
     B. B) DJIBOUTI 711 
 
1. This cable contains proprietary corporate information. 
Please protect accordingly. 
 
2. (SBU)  Summary:  Alain Adam, Director General of 
Exxon-Mobil operations in Djibouti (Mobil), briefed 
the Ambassador and DCM on May 23 about his meeting 
with Exxon-Mobil's East and Southern Africa Cluster 
Manager John DiTullio last week.  Mobil 
Djibouti's immediate plans are to ask 
clarification from the Government of Djibouti 
(GoDj) on the May 10 letters giving foreign oil 
companies a year before shutting down terminal 
operations at the old port; to approach 
Abdurahman Boreh, 40 percent partner in the new port 
of Doraleh, on the possibility of participating in the 
oil terminal there; and to tally up present assets and 
obligations to allow the company to do a cost-benefit 
analysis of maintaining operations in Djibouti by 
moving them to Doraleh.  Adam remains concerned about 
the lack of specifics on the new facilities, and 
whether the GoDj will seriously address the problem 
of compensation for lost physical assets and the 
company's financial obligation to the more than 80 
employees who will lose their jobs when the present 
terminal stops operations. End Summary. 
 
3. (SBU) Alain Adam, Director General of 
Exxon-Mobil operations in Djibouti (Mobil), 
was pleased with his meetings in 
Addis Ababa last week with Exxon-Mobil's 
East and Southern Africa Cluster 
Manager John DiTullio and that there had 
been a clear signal on how to proceed. 
He mentioned that the GoDj was continuing its 
negotiations with the Ethiopian government 
on supplying petroleum products.  Adam thought 
these meetings were not proceeding smoothly, 
and had been surprised when the Ethiopian 
Petroleum company (EPE) extended its contract 
with Mobil from December 31, 2004 through 
June 2005. 
 
4. (SBU)  Adam seemed particularly pleased that he 
had been authorized to deal directly with Abdurahman 
Boreh, 40 percent shareholder in Doraleh ports, 
on the possibility of moving operations there.  He 
hopes to see Boreh on May 28 or 29, if possible with 
Shell General Manager Jean Pierre Wyns, and Total 
representative Francois de Charnasse. (Note: Shell 
and Mobil have firm plans to conclude a joint venture 
to merge operations in Djibouti within the year. Total 
has recently joined these negotiations and may bring 
its operations into the joint venture, as well. End 
Note.) Adam said he wanted to clear up any 
misperception that Mobil was somehow opposed to 
the Doraleh project. 
 
5. (SBU) The May 10 letters from Boreh and the 
Minister of Transport will require considerable 
follow up. Initial plans are to write a letter to 
the Minister of Transport to obtain maximum details 
on the Doraleh port and the consequences of closure 
of operations at the existing port.  The letter will 
be vetted through Exxon-Mobil legal offices in 
Brussels in consultations with local attorney 
Alain Martinet. In the interim, Mobil will evaluate 
all its assets in Djibouti, including tanks, land, 
and the cost of a severance package to existing 
employees.  Exxon-Mobil will not accept, he said, 
any offset of its existing properties for clean-up 
costs the Government of Djibouti may seek to levy. 
"The court case against Mobil for pollution is a 
different matter from being forced out of the 
country," Adam said. 
 
6. (SBU) Comment: Adam seems better focused on how to 
proceed in resolving Mobil's principal problem with 
the Government of Djibouti. Unclear, specifically, are 
costs and conditions for using the Emirate National 
Oil Company (ENOC) facilities in Doraleh, and whether 
ENOC has obtained a contract for refueling U.S. 
naval vessels.  However, Adam now has a game plan. 
In the meantime, we will continue to consult with Mobil 
on this and other issues.  These include Government of 
Djibouti charges of Mobil polluting the harbor, and 
Mobil's difficulties with corrupt judges.  End comment. 
RAGSDALE