By Dan Coughlin and Kim Ives
The Nation

Préval’s dramatic inauguration day oil deal won high marks from many Haitians, who had demonstrated against high oil prices and the lack of electricity. But it ushered in a multiyear geopolitical battle among Caracas, Havana and Washington over how oil would be delivered to Haiti and who would benefit.

When René Préval took the oath of Haiti’s presidential office in a ceremony at Haiti’s National Palace on May 14, 2006, he was anxious to allay fears in Washington that he would not be a reliable partner. “He wants to bury once and for all the suspicion in Haiti that the United States is wary of him,” said US Ambassador Janet Sanderson in a March 26, 2006, cable. “He is seeking to enhance his status domestically and internationally with a successful visit to the United States.”

This was so important that Préval “declined invitations to visit France, Cuba, and Venezuela in order to visit Washington first,” Sanderson noted. “Preval has close personal ties to Cuba, having received prostate cancer treatment there, but has stressed to the Embassy that he will manage relations with Cuba and Venezuela solely for the benefit of the Haitian people, and not based on any ideological affinity toward those governments.”

Soon, however, it became clear that managing relations with those US adversaries “solely for the benefit to the Haitian people” would be enough to put Préval in Washington’s bad graces—especially when it came to the sensitive matter of oil.

Immediately after his inauguration ceremony, Préval summoned the press to a room in the National Palace, where he inked a deal with Venezuelan Vice President José Vicente Rangel to join Caracas’s Caribbean oil alliance, PetroCaribe. Under the terms of the deal, Haiti would buy oil from Venezuela, paying only 60 percent up front with the remainder payable over twenty-five years at 1 percent interest.

As the press conference rolled on, just a mile away from the National Palace, in the bay of Port-au-Prince, sat a tanker from Venezuela carrying 100,000 barrels of PetroCaribe diesel and unleaded fuel.

Préval’s dramatic inauguration day oil deal won high marks from many Haitians, who had demonstrated against high oil prices and the lack of electricity. But it ushered in a multiyear geopolitical battle among Caracas, Havana and Washington over how oil would be delivered to Haiti and who would benefit.

The revelations come in a trove of 1,918 cables made available to the Haitian weekly newspaper Haïti Liberté by the transparency group WikiLeaks. As part of a collaboration with Haïti Liberté, The Nation is publishing English-language articles based on those cables.

The State Department did not respond to a request for comment on the disclosures in this article.

According to the leaked US Embassy cables, Washington and its allies, including Big Oil majors like ExxonMobil and Chevron, maneuvered aggressively behind the scenes to scuttle the PetroCaribe deal.

For the Haitian government the oil support from Venezuela was key in providing basic needs and services to 10 million Haitians, securing a guaranteed supply of oil at stable prices, and laying the basis for Haitian energy independence from the United States.

Further, Haiti “would save USD 100 million per year from the delayed payments,” noted the Embassy in a July 7, 2006, cable. Préval earmarked these funds for hospitals, schools and emergency needs, such as disaster relief. But the US Embassy opposed the deal.

“Post [the Embassy] will continue to pressure Preval against joining PetroCaribe,” Ambassador Sanderson wrote in one April 19, 2006, cable. “Ambassador will see Preval’s senior advisor Bob Manuel today. In previous meetings, he has acknowledged our concerns and is aware that a deal with Chavez would cause problems with us.”

In a cable nine days later, on April 28, Sanderson recognized that Préval was under “increasing pressure to produce immediate and tangible changes in Haiti’s desperate situation.” She also noted that “Preval has privately expressed some disdain toward Chavez with Emboffs [Embassy officials]…. Nevertheless, the chance to score political points [with the Haitian people] and generate revenue he can control himself proved too good an opportunity to miss.”

Sanderson, who had been appointed ambassador to Haiti by President Bush, is now deputy assistant secretary of state in the Obama administration.

To implement the PetroCaribe deal, Haiti had to meet certain terms and reorganize its internal oil market. As a result, it would be almost two years before PetroCaribe oil would begin consistently flowing into Haiti. The key obstacles, though, remained the US Embassy and Big Oil, which controlled oil shipping and distribution networks in Haiti, according to the WikiLeaks cables.
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“International oil companies are increasingly concerned—both Texaco and Esso will meet with the Ambassador in the near future—that they will have to buy their oil from the GOH [Government of Haiti],” wrote Ambassador Sanderson in a May 17, 2006, cable, concluding that “we will continue to raise our concerns about the PetroCaribe deal with the highest levels of government.”

Christian Porter, ExxonMobil’s country manager, “speaking for both ExxonMobil and Chevron, stressed that they would not be willing” to buy oil from the Haitian government “because they would lose their off-shore margins and because of PetroCaribe’s unreliable reputation” for timely deliveries, Sanderson wrote. She concluded that it was a “dubious proposal that neither the U.S. oil companies in Haiti—responsible for about 45 percent of Haiti’s petroleum imports—nor Venezuela, for that matter, is likely to agree to.”

She was wrong about Venezuela but right about the oil companies. An October 13, 2006, cable explains that ExxonMobil and Texaco/Chevron were “shocked” but hadn’t “informed the government of their concerns,” which Sanderson encouraged the two companies to do.

Sanderson reiterated that despite her “numerous attempts to discuss (and discourage) GOH intentions to move forward with the PetroCaribe agreement, the GOH insists the agreement, implemented in full, will result in a net gain for Haiti.”

The US ambassador also detailed how the oil companies were attempting to sabotage the agreement: “Following Preval’s September 27 meeting with all four oil companies… the oil industry association (Association des Professionals du Petrole—APP) received an invitation to meet with representatives of the Venezuelan oil company who were in Haiti. All four companies refused to attend. Also, the companies received letters separately requesting information on importation and distribution from the GOH on October 9. So far, no one has responded.”

Sanderson concluded one long October 13 cable by explaining how she had stressed “the larger negative message that [the PetroCaribe deal] would send to the international community [i.e., Washington and its allies] at a time when the GOH is trying to increase foreign investment,” and lamenting that “President Preval and his inner circle are seduced by [PetroCaribe’s] payment plan.”

The Oil Companies and US Embassy Dig In

With parliamentary ratification and technical details resolved, by early 2007 Préval thought he finally had everything in place to get PetroCaribe implemented. But the oil companies were not done trying to undermine the deal.

Michael Lecorps, appointed by Préval to head the government’s Monetization Office for Aid and Development Programs (formally known as the PL-480 office), which would handle PetroCaribe matters, told the oil companies that they would have to purchase PetroCaribe oil from the Haitian government, but the US companies said no. Quickly, there was a standoff.

 

Source:  The Nation