US embassy cable - 05MANAMA24

C O N F I D E N T I A L SECTION 01 OF 04 MANAMA 000024 
 
SIPDIS 
 
EMBASSY RIYADH PASS DHAHRAN 
 
E.O. 12958: DECL: 01/04/2015 
TAGS: PREL, PGOV, ETRD, EPET, BA 
SUBJECT: KING FOCUSES ON RELATIONS WITH SAUDI ARABIA IN 
MEETING WITH AMBASSADOR 
 
 
Classified by Ambassador William T. Monroe for reasons 1.4 
(b) and (d). 
 
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Summary 
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1.  (C) King Hamad, in a January 3 meeting with the 
Ambassador, expressed his appreciation for his November 29 
meeting with the President and reaffirmed Bahrain's 
friendship with the United States.  The Ambassador thanked 
the King for the GOB's continued surveillance of the four 
terrorist suspects and urged the government to pursue a 
vigorous prosecution.  The King recounted his visit with 
Saudi Crown Prince Abdulla shortly after the December 20-21 
GCC Summit, saying he was not happy with Saudi Arabia's 
"unusual behavior" towards Bahrain.  The King voiced his 
opinion that CP Abdulla believes the U.S.-Bahrain Free Trade 
Agreement (FTA) and FTA negotiations with other Gulf States 
could lead to the break-up of the GCC.  The King said that 
Saudi Arabia did not like direct contact between other GCC 
members.  He explained that after spending $700 million to 
expand production of the joint Bahraini-Saudi Abu Saafa 
field, Bahrain was actually receiving less oil from Saudi 
Arabia than before.  He noted that FTA ratification was on 
track in the Bahraini parliament, and expressed his 
confidence that Bahrain's Shia would participate in elections 
in 2005 and 2006.  The King hoped that the President would 
make a push on the roadmap following Palestinian elections. 
End Summary. 
 
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Grateful for Meeting with President 
----------------------------------- 
 
2.  (C) King Hamad told the Ambassador January 3 that he was 
happy to have met with the President so soon after the U.S. 
election, saying that Bahrain is a small country but it plays 
a big role in the region.  He said that Bahrain is proud of 
its friendship with the United States and has been with the 
U.S. "from the beginning."  The U.S. role in the region has 
been very positive:  the U.S. freed Iraq and deters Iran. 
The King complimented the Ambassador on his interview that 
appeared in the December 29 edition of the Bahrain Tribune 
and Al Ayam newspapers. 
 
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Joint Counter-Terrorism Efforts 
------------------------------- 
 
3.  (C) The Ambassador raised our joint counter-terrorism 
efforts, stating that the U.S. appreciates continued Bahraini 
surveillance of the four terrorist suspects currently on 
trial.  The United States, the Ambassador continued, wants 
the GOB to pursue the prosecution energetically.  The King 
replied that Minister of Interior Shaikh Rashed bin Abdulla 
Al Khalifa is close to him and is doing well.  Shaikh 
Rashed's goal is to develop a relationship between the MOI 
and the United States that is as close as the relationship 
between the Ministry of Defense and the U.S.  The Ambassador 
responded that the USG is supporting Shaikh Rashed's efforts. 
 
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Saudi Arabia's "Unusual Behavior" 
--------------------------------- 
 
4.  (C) The Ambassador praised the King for his handling of 
the December 20-21 GCC Summit in Manama, and asked the King 
for his thoughts on Saudi Arabia.  The King replied that he 
had visited Crown Prince Abdulla shortly after the summit. 
He said that Bahrain had always provided counsel to Saudi 
Arabia, from the time of Ibn Saud, and Bahrainis are the only 
people who are honest with the Saudis.  He reported that he 
told CP Abdulla that he was not happy with Saudi Arabia's 
"unusual behavior" at the GCC Summit.  Saudi Arabia is the 
backbone of the GCC, and by not participating, something 
could go wrong.  The King told CP Abdulla that Saudi Arabia 
will not get what it wants from the world because of the way 
the SAG runs the country.  Saudi Arabia needs the Gulf States 
as an outlet to the world.  Saudi Arabia relies on Bahrain 
for much of its banking and insurance requirements, and Dubai 
is the destination for Saudi investments in construction and 
real estate. 
 
5.  (C) The King said that he told CP Abdulla that the United 
States appreciates what Saudi Arabia is doing in the fight 
against terrorism, but Saudi Arabia should be more forward 
leaning in explaining its views.  President Bush is a friend 
of Saudi Arabia, and the SAG should "help him help you."  The 
King commented that CP Abdulla is a national guardsman, not a 
politician or economist, and he does not know how to use the 
media to his advantage. 
 
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Saudi Concern About FTAs 
------------------------ 
 
6.  (C) The King continued that CP Abdulla believes that the 
U.S.-Bahrain Free Trade Agreement (FTA) and FTA negotiations 
with other Gulf countries could lead the GCC to break-up. 
The King related that he told CP Abdulla that all GCC 
countries are now members of the World Trade Organization 
(WTO) except Saudi Arabia, and the SAG did not complain when 
they joined the WTO, so why now be worried about FTAs?  The 
Ambassador noted that U.S. officials had briefed Saudi Arabia 
on our FTA plans before announcing our intention to negotiate 
with Bahrain, and the Saudis had not objected. 
 
7.  (C) The King said that he told CP Abdulla that whoever 
was advising him regarding FTAs was not a friend of the 
United States.  The Gulf States are independent and benefit 
from their relationships with the U.S., and Saudi Arabia 
should do the same.  The King asked CP Abdulla how Saudi 
Arabia would market its Jubail industrial complexes if it did 
not promote trade with the U.S. and others.  Saudi Arabia, 
the King continued, is jealous of Bahrain's relationship with 
the United States.  It also views Bahrain's improved 
relations with Qatar, and talk of development of a causeway 
linking the two countries, as cutting Saudi Arabia out of the 
picture.  Saudi Arabia does not like direct contact between 
the Gulf States; it prefers to be the broker.  The King 
stated that he had met with Qatari Emir Hamad and joked that 
the two countries previously had to fight over Hawar Island, 
but now that this was settled, there should be no border 
between them. 
 
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Saudi Cold Shoulder in Washington 
--------------------------------- 
 
8.  (C) The King told the Ambassador that neither Saudi 
Prince Bandar nor any other representative of the Saudi 
Embassy had met him upon his arrival in the United States, 
whereas all the other Arab embassies were present.  He met 
later with Bandar, who told the King that he was "the most 
frustrated man in the world."  He is welcomed by the White 
House, but he does not have guidance on how to respond when 
the President asks him questions.  The King commented that 
the Saudi leadership is tough in fighting terrorism but does 
not see the global picture or how to engage internationally. 
 
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Bahrain's Oil Woes 
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9.  (C) Turning the discussion to petroleum, the King said 
that Saudi Arabia is playing a role in stopping inter-GCC 
trade.  Qatar wants to export natural gas to Bahrain and 
Kuwait, but Saudi Arabia will not give approval for a 
pipeline to go through its territory.  The King said that he 
complained to CP Abdulla that Saudi Arabia had cut off a 50 
thousand barrel per day (bpd) allotment that it had given to 
Bahrain for five years against Bahrain's share of the Abu 
Saafa oil field.  He explained that Saudi Arabia and Bahrain 
split production from the Abu Saafa field (under a 1950's-era 
treaty).  Output had been 150 thousand bpd, of which Bahrain 
received 75 thousand bpd.  In the mid-1990's, however, Saudi 
Arabia donated its share to Bahrain, which then received all 
150 thousand bpd.  And in 1999, Saudi Arabia provided an 
additional 50 thousand bpd drawn against its share of future 
production from the Abu Saafa field, for a total of 200 
thousand bpd. 
 
10.  (C) The two countries, the King continued, decided to 
boost production of the Abu Saafa field from 150 thousand to 
300 thousand bpd.  This additional amount would provide 
important revenue for the GOB budget and pay for the 
government's plans for economic development.  The King 
claimed that Bahrain borrowed $700 million for the expansion 
of the field.  Now that the field is producing at the higher 
rate, Saudi Arabia is giving Bahrain only its 50 percent 
share (150 thousand bpd) and has stopped the 50 thousand bpd 
loan.  So Bahrain is receiving less oil than before (150 
versus 200 thousand bpd) and must pay off its investment of 
$700 million.  The King said that Saudi Petroleum Minister 
Nuaimi announced recently that Saudi Arabia has 2 million bpd 
of extra capacity.  He complained that Bahrain wants only 50 
thousand of this 2 million, but cannot get it.  He recalled 
that some years ago the American Ambassador in Riyadh had 
intervened on Bahrain's behalf, and wondered if the U.S. 
could get involved now. 
 
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"Radio Silence" From Riyadh 
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11.  (C) The King noted that Saudi Arabia had stopped its 
exports of sand (used in construction) to Bahrain, Kuwait, 
and Qatar because of Bahrain's reforms and the FTA.  (Note: 
The Saudi Ambassador in Bahrain told the Ambassador 
previously that the sand exports stopped because of a dispute 
over contracts and concerns about environmental degradation 
at sand "quarries."  End Note.)  When Bahrain asks Saudi 
Arabia about the oil, sand, and gas pipeline from Qatar, it 
gets only "radio silence." 
 
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FTA Ratification on Track 
------------------------- 
 
12.  (C) The King told the Ambassador that the Bahraini 
parliament will soon take up ratification of the FTA and will 
approve it.  The Bahraini people are happy with the FTA. 
 
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Shia Participation in Elections 
------------------------------- 
 
13.  (C) The Ambassador noting that Lebanese Shia cleric 
Mohammed Hussein Fadlallah had given an interview to Al Wasat 
newspaper and advised Bahrain's Shia to participate in 
elections, asked if the King was optimistic about them 
participating in the next elections.  The King expressed 
confidence that the opposition parties would participate in 
the elections.  The majority had done so in 2002, he said, 
but the government wants all Shia to do so in the future. 
(Note:  Municipal elections will take place in fall 2005 and 
parliamentary elections in fall 2006.  End Note.) 
 
14.  (C) The King said that the best Bahrainis who had been 
in exile in London had returned.  He spoke highly of Al Wasat 
editor-in-chief Mansour Al Jamry, who "speaks in a modern way 
and says what is right and wrong."  Majid Al Alawi, the 
Minister of Labor and Social Affairs, was very good but the 
oppositionists are upset with him because he is "one of the 
family."  The King said that he had met Saeed Al Shehabi of 
the Bahrain Freedom Movement in London and invited him to 
return to Bahrain, but he "is more comfortable in London." 
The Shia boycotters are not those who were in the UK, but 
those who follow Iran's orders.  He noted that Shia 
opposition society Al Wifaq had organized a conference to be 
held January 4 "with the support of the government."  Al 
Wifaq had invited former Lebanese PM Salim Al Hoss and 
Kuwaiti thinker Al Rumaihi to participate, and these are the 
kinds of people the government wants involved, not "radicals 
from Qom." 
 
15.  (C) The King noted that Iranian President Khatemi's wife 
would visit Bahrain soon at the invitation of the King's wife 
Shaikha Sabika, and she would see a lifestyle much more 
cosmopolitan than that in Iran.  The King joked that Khatemi 
is a moderate, but a terrorist; Khamenei is a religious 
cleric, but a terrorist; and Rafsanjani is a businessman, but 
a terrorist. 
 
16.  (C) The King noted that he would travel to Kuwait 
January 4 to have lunch with Shaikh Jaber and brief him on 
the GCC Summit.  He commented that Kuwait is under pressure 
from the Salafis in parliament and because of the presence of 
American troops, and needs support from Bahrain and the U.S. 
 
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Push on the Roadmap 
------------------- 
 
17.  (C) The King stated that he had just returned from 
vacation in Sharm El Sheikh, Egypt, where he had met 
President Mubarak and UK PM Blair, who was also vacationing 
there, and he had spoken with Jordanian King Abdullah.  They 
had all discussed the opportunity for movement on the 
Palestinian situation.  The King hoped that following the 
Palestinian election, President Bush would make a push on the 
roadmap.  The King recounted that he had told Blair that the 
Palestinians had supported Saddam's invasion of Kuwait and, 
"like President Bush," he does not trust the Palestinians. 
However, we must help them during this period. 
 
MONROE