US embassy cable - 05KUWAIT4146

UNCLAS KUWAIT 004146 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/ARPI AND KATRINA WORKING GROUP 
 
E.O. 12958: N/A 
TAGS: AEMR, EAID, PREL, ENRG, KU, US 
SUBJECT: KPC CHIEF ON IMPLEMENTATION OF GOK KATRINA AID 
(PETROLEUM PRODUCTS) 
 
REF: KUWAIT 4050 
 
Sensitive but Unclassified; Protect accordingly.  Not for 
Internet distribution. 
 
1. During a September 20 meeting with Ambassador, Kuwait 
Petroleum Corporation CEO Hani Hussain, offered further 
clarification of GOK intentions on mechanisms for 
distribution of petroleum product assistance connected to 
Hurricane Katrina relief, specifically on the pricing of the 
$100 million of jet fuel for OIF use.  The Ambassador 
confirmed with Hussain that the current understanding was 
that $400 million in petroleum product aid would consist of 
$100 million in jet fuel for OIF use and $300 million in 
petroleum products for Katrina relief in the U.S. 
 
2.  Hussain agreed to the Ambassador's recommendation that 
KPC and DESC begin discussions on contractual arrangements 
for the $100 million in jet fuel.  He said that the jet fuel 
would be calculated at market price (as opposed to the 
concessionary price under which DESC is currently purchasing 
800,000 gallons per day).  (Embassy ECON has been in touch 
subsequently with officials at DESC and the KPC Marketing 
Office, and they have agreed to initiate contact.) 
Ambassador noted to Hussain that we are well aware that the 
Kuwaiti National Assembly needs to approve the overall aid 
package before any arrangement can be finalized, but it makes 
sense to discuss modalities now. 
 
3.  On the $300 million in petroleum products for the U.S., 
Ambassador provided Hussain a copy of the NSC paper detailing 
USG dispersal modalities, recommending that it would be more 
efficient for the GOK to sell the product and then provide 
the proceeds as a cash grant.  Hussain was noncommittal on 
this mechanism, noting that the GOK wanted its aid to have 
some visible impact.  He said he would need to consult 
further with the Minister of Energy on this portion of the 
aid.  Ambassador agreed that the U.S. and GOK should work 
together to make sure that the various elements of the GOK 
donation receive recognition in the U.S., but noted the 
relative efficiency of introducing cash into the aid effort 
as opposed to figuring out modalities to accept free product. 
 
 
 
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Visit Embassy Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
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LEBARON