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Viewing cable 07RECIFE2, PERNAMBUCO GOVERNOR BELIEVES VENEZUELA WON'T STAY IN

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Reference ID Created Released Classification Origin
07RECIFE2 2007-01-09 17:35 2011-07-11 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Recife
VZCZCXRO3323
PP RUEHRG
DE RUEHRG #0002 0091735
ZNR UUUUU ZZH
P 091735Z JAN 07
FM AMCONSUL RECIFE
TO RUEHC/SECSTATE WASHDC PRIORITY 0554
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
INFO RUEHRG/AMCONSUL RECIFE 0783
RUEHBR/AMEMBASSY BRASILIA PRIORITY 0732
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 0287
RUEHSO/AMCONSUL SAO PAULO PRIORITY 0287
RUEHCV/AMEMBASSY CARACAS PRIORITY 0007
RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 0015
RUEHBO/AMEMBASSY BOGOTA PRIORITY 0003
RUEHAC/AMEMBASSY ASUNCION PRIORITY 0004
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 0014
RUEHPE/AMEMBASSY LIMA PRIORITY 0003
RUEHQT/AMEMBASSY QUITO PRIORITY 0001
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS RECIFE 000002 
 
SIPDIS 
 
DOE FOR GWARD, STATE PASS USTR FOR SCRONIN, TREASURY FOR OASIA 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ENRG EPET PGOV BR
SUBJECT: PERNAMBUCO GOVERNOR BELIEVES VENEZUELA WON'T STAY IN 
 
REFINERY PROJECT 
 
REF: 2005 RECIFE 130, RECIFE 166 
 
1. (SBU) Summary: In October 2005, Brazil's President Luiz 
Inacio Lula da Silva announced a joint investment with Venezuela 
in a $2.5 billion oil refinery to be built in the Suape port 
complex of Pernambuco state. Two months later, Lula and 
Venezuelan President Hugo Chavez laid the cornerstone for the 
oil refinery. But the new Pernambuco Governor Eduardo Campos, a 
close ally of Lula, told the Ambassador January 4 that he does 
not believe Venezuela will participate in the project because 
the Brazilian oil company Petrobras wants 100 percent control. 
End Summary 
 
2. (SBU) During the Ambassador's first meeting with Pernambuco 
Governor Eduardo Campos on January 4, the Governor gave his 
frank views on the state's major development project, the 
petro-chemical complex being built in the modern port of Suape. 
Campos told the Ambassador that although the Brazilian and 
Venezuelan governments want a 50-50 joint venture, the companies 
(Petrobras and PDVSA) have different ideas. Due to the clash 
between the companies, Campos said the deal has "come undone." 
(desfez)  He made this surprising statement blandly, with a 
shrug, indicating it was a fact he accepted.  (Recife Prinicipal 
Officer went back to the Governor's notetaker on January 8, to 
confirm the Governor's statement that Venezuela was out, and the 
Governor's chief of staff again affirmed that "it does not 
matter what happens with Venezuela because Petrobras is going to 
build the refinery anyway."  He did not contradict the 
governor's private opinion.) 
 
3. (U) There have been rumors since last November, when Campos 
accompanied Lula on a trip to Venezuela shortly after the 
elections, that Petrobras neither needed nor wanted the 
Venezuelan state company as a 50-50 partner. In public 
statements, the partnership is still given as a fact. Meanwhile, 
the preparatory studies for the refinery are underway, but no 
official announcements have been made regarding Venezuela's 
actual participation in the $2.5 billion dollar project. Chavez 
influenced the location of the refinery in Pernambuco, which is 
the home of the Brazilian General Jose Ignacio de Abreu e Lima, 
who fought with Venezuela's Liberator Simon Bolivar against 
Spain. (Lula was also born in Pernambuco.) The refinery is to be 
named Abreu e Lima. Presidents Lula and Chavez laid the 
cornerstone on December 15, 2005 (REFTELS). 
 
4. (U) Eduardo Campos was sworn in as governor of Pernambuco 
January 1, after a three-way election race culminating in his 
victory during the second round. Lula did not take sides during 
the first round, when his former health minister, Humberto Costa 
from the Workers Party (PT), ran against Campos, who was Lula's 
former science minister and the leader of the Brazilian 
Socialist Party (PSB).  Then in the second round, Lula and 
Campos campaigned together. Campos, 41, is an economist best 
known locally as the grandson of the late three-time governor 
Miguel Arraes, an old-left leader who opposed the military 
government. 
 
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