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Viewing cable 08TRIPOLI319, DEBT, ARMS, AND ENERGY ON AGENDA FOR QADHAFI-PUTIN MEETING

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Reference ID Created Released Classification Origin
08TRIPOLI319 2008-04-15 15:54 2011-08-24 01:00 UNCLASSIFIED Embassy Tripoli
VZCZCXRO8054
OO RUEHAG RUEHAST RUEHBC RUEHDA RUEHDE RUEHDF RUEHFL RUEHIK RUEHKUK
RUEHKW RUEHLA RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTRO #0319/01 1061554
ZNR UUUUU ZZH
O 151554Z APR 08
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3350
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHEE/ARAB LEAGUE COLLECTIVE
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHTRO/AMEMBASSY TRIPOLI 3851
UNCLAS SECTION 01 OF 02 TRIPOLI 000319 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR NEA/MAG AND EUR/RUS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KNNP ETTC ENRG PINR ELTN RS LY
SUBJECT: DEBT, ARMS, AND ENERGY ON AGENDA FOR QADHAFI-PUTIN MEETING 
 
REF: A) TRIPOLI 297, B) 07 TRIPOLI 1038 
 
TRIPOLI 00000319  001.2 OF 002 
 
 
1. (C) Summary: With Russian President Vladimir Putin scheduled 
to arrive on April 16 for an overnight visit, hundreds of 
Russian security and support staff have descended on Tripoli, 
filling the capital's major hotels, old city and shopping 
districts.  Confirming media reports, Russian Embassy officials 
say Putin's agenda for meetings with Leader Muammar al-Qadhafi 
will include rescheduling Soviet-era debt, and discussing 
military equipment sales, gas production and a possible civilian 
nuclear energy agreement.  Officials from Rosoboroneksport and 
Gazprom will accompany Putin.  End summary. 
 
2. (C) Putin will overnight at Tripoli's sole (nominal) 
five-star venue, the Corinthia Baab Afriqiya Hotel (which also 
houses the US Embassy).  Hundreds of busy Russian advance 
officials have managed to make time to tour Tripoli's Old City 
and to shop for inexpensive knock-off clothing and goods in 
adjacent markets.  The Slovak Ambassador told the CDA that the 
Russian delegation comprises some 580 individuals arriving in 
Triopli on six to eight Russian aircraft. 
 
3. (C) Russian Poloff Evgeny Kozlov told P/E Chief on April 14 
that after fierce negotiations with the GOL over the venue for 
the visit, Putin will remain in Tripoli for meetings with Leader 
Muammar al-Qadhafi.  It is not expected that Putin will travel 
to Qadhafi's hometown of Sirte, where he often prefers to host 
visiting heads of state.  Confirming media reports, Kozlov said 
Putin's agenda for his meetings with Qadhafi consist of 
rescheduling Soviet-era debt and discussing conventional 
military equipment sales, natural gas production and a possible 
civilian nuclear energy agreement.  Kozlov said finalizing a 
mechanism for settling Libya's debt, which he put at "several 
billion dollars", was a key priority for Putin.  (Note: Media 
reports, citing Russia's 2007 budget, claim a figure of $3.5 
billion. End note.) He conceded that a possibility was an 
arms-for-debt structure akin to that brokered by Russia with 
neighboring Algeria in 2006.  In that deal, he said, Russia 
forgave Soviet-era debt and Algeria agreed to purchase Russian 
military equipment. 
 
4. (C) Kozlov said an arms-for-debt deal had been under 
discussion for "several years" under the rubric of a joint 
Russian-Libyan military cooperation council established in the 
late 1990's (see ref B).  Russian news agency Interfax reported 
April 14 that the deal would include $2.5 billion worth of 
anti-aircraft systems, MiG and Sukhoi tactical aircraft, 
helicopters, submarines and warships.  Kozlov confirmed that 
officials from Rosoboroneksport were among Putin's delegation. 
(Note: As reported reftel, a Rosoboroneksport official told 
former Congressman Curt Weldon that sales of tactical and 
strategic airlift aircraft and armored vehicles, and overhaul of 
Libyan naval vessels, would be on the table.  End note.) 
 
5. (C) Confirming that Gazprom officials would also number among 
Putin's party, Kozlov said discussions with Qadhafi were 
expected to touch on greater involvement by Russian hydrocarbon 
giant Gazprom in projects in Libya in connection with Italian 
company Eni.  Following a publicized meeting in Moscow last week 
between Eni chief executive Paolo Scaroni and Gazprom chief 
Alexei Miller, it was announced that Gazprom is in talks with 
Eni about a potential asset swap that would give Gazprom access 
to gas fields in Libya.  As reported ref B, Gazprom won 
exploration and production rights in the December 2007 
Exploration and Production Sharing Agreement bid round for three 
blocks of area 64 in the Ghadames Basin.  Local oil and gas 
contacts say Gazprom is keen to expand its presence in Libya; 
media reports suggest the company's expansion into Libya is part 
of a deliberate strategy to further monopolize gas supplies for 
Europe's lucrative market. 
 
6. (C) Although media attention to the issue has abated in the 
run-up to the visit, Kozlov reiterated remarks reported ref A 
that Russia intends to capitalize on a "golden opportunity" to 
sign a general framework agreement on civilian nuclear 
cooperation during Putin's visit.  Other diplomatic contacts 
have reported that the Russians hope to exploit the fact that 
French-Libyan civilian nuclear cooperation has not progressed to 
the GOL's satisfaction since a parallel agreement was signed 
during President Sarkozy's visit to Libya last year.  Kozlov 
suggested that a Russia-Libya civilian nuclear agreement 
could/could also be linked to forgiving Libya's Soviet-era debt. 
(Note: It is unclear how this would work, since the civilian 
nuclear deal has been characterized to us as a general framework 
agreement, with commercial details to be negotiated and 
finalized in the future.  End note.) 
 
7. (C) Comment:  Following in the tradition of Sarkozy's visit 
 
TRIPOLI 00000319  002.2 OF 002 
 
 
to Tripoli and Qadhafi's December 2007 stops in Paris and 
Madrid, Putin appears poised to engage in some high-stakes 
commercial diplomacy.  The GOL traditionally uses high-value 
commercial contracts as expressions of its political goodwill, 
and is working to cast the visit as one more manifestation of 
its policy of successful engagement with European partners.  End 
comment. 
STEVENS