US embassy cable - 04ABUDHABI1701

C O N F I D E N T I A L ABU DHABI 001701 
 
SIPDIS 
 
E.O. 12958: DECL 05/24/08 
TAGS: EPET, PGOV, BEXP, ENRG, ECON, EINV, TC, IR 
SUBJECT:  UAEG RECEIVES DEMARCHE ON ILSA 
 
REFS: A) STATE 108728 
 
      B) DUBAI 1948 AND PREVIOUS 
      C) ABU DHABI 1540 
 
1.  (U) Classified by Deputy Chief of Mission Richard A. 
Albright, for reasons 1.5 (B) and (D). 
 
2.  (C) The Ambassador raised ref A talking points May 23 
with UAE Deputy Prime Minister and Minister of State for 
Foreign Affairs Hamdan bin Zayed Al-Nahyan (HbZ) and 
expressed USG concern about reports of plans to import 
Iranian gas to the UAE.  HbZ noted that the UAE's future 
energy needs require looking for alternate sources of gas, 
but the UAEG did not want to provoke USG sanctions under 
ILSA.  HbZ added that he met with an Iranian official 
recently to discuss the pending gas deal, which Tehran is 
eager to conclude to begin gas exports to the UAE within 
six months.  He reiterated to the Ambassador that all gas 
deals with Iran are pending, and no company in the UAE 
would move forward without the explicit consent of Abu 
Dhabi. 
 
3.  (C) Separately, the Ambassador discussed USG concerns 
with Abu Dhabi Deputy Crown Prince and UAE Armed Forces 
Chief of Staff Mohammed bin Zayed Al-Nahyan (MbZ) during 
his recent visit to Washington.  MbZ responded that the 
UAEG is aware of the ILSA statute and would not violate the 
sanctions.  MbZ reportedly also had a very positive meeting 
with Occidental Petroleum Chairman Dr. Ray Irani during his 
official visit to Washington.  According to Oxy 
representatives, MbZ allayed their concerns about the 
negative repercussions a gas deal with Iran could pose to 
the Dolphin project, and explained that the UAE's future 
gas requirements far surpass what the Dolphin project is 
able to provide.  Any gas deal with Iran would seek to 
satisfy the UAE's longer-term gas deficit. 
 
4.  (C) CG raised reftel talking points May 23 with the 
Chief of the Ruler's court in Dubai, Dr. Khalifa Ahmed 
Suleiman, and with Crescent Oil Chairman Hamid Jaffar in 
Sharjah.  Both men listened closely and said that they 
understood the message.  CG also raised the talking points 
with Brig. Michael Barclay, a British expat who handles 
many petroleum-related issues for the de facto ruler of 
Dubai, Shaykh Mohammed bin Rashid Al-Maktoum (MbR). 
Barclay said that Dubai was "talking to everyone in the 
neighborhood" who had gas, which was something Dubai 
desperately needed, but that no decisions or deals had been 
reached.  Barclay said that Dubai had no intention of 
violating ILSA, and had lawyers studying that situation 
closely.  He said that Dubai officials also understood that 
U.S. concerns went beyond what was stipulated in ILSA.  His 
longstanding marching orders had been "don't do anything 
that would give offense to the U.S.," and those orders 
remained in effect. 
 
5.  (C) In recent weeks, Econoff in Abu Dhabi has discussed 
our concerns about Iranian gas imports with Chief Operating 
Officer of Mubadala (and former Projects Manager for UAE 
Offsets Group) Khaldoon Al-Mubarak (ref C).  Mubarak is 
cognizant of Washington's sensitivities to any proposed gas 
deal with Tehran, and undertook to avoid conflict with our 
ILSA statute.  We will seek additional details from our 
interlocutors on the pending gas deals, including 
information on the specific source of the gas to be 
imported from Iran, the value of the proposed agreements, 
and the volumes contemplated. 
 
Wahba