Cable Viewer

Currently released so far... 4051 / 251,287

### Articles

Brazil Sri Lanka United Kingdom Sweden Editorial United States Latin America Egypt Yemen Jordan

### Browse latest releases

2010/11 2010/12 2011/01 2011/02
2010/11/28 2010/11/29 2010/11/30
2010/12/01 2010/12/02 2010/12/03 2010/12/04 2010/12/05 2010/12/06 2010/12/07 2010/12/08 2010/12/09 2010/12/10 2010/12/11 2010/12/12 2010/12/13 2010/12/14 2010/12/15 2010/12/16 2010/12/17 2010/12/18 2010/12/19 2010/12/20 2010/12/21 2010/12/22 2010/12/23 2010/12/24 2010/12/25 2010/12/26 2010/12/27 2010/12/28 2010/12/29 2010/12/30
2011/01/01 2011/01/02 2011/01/04 2011/01/05 2011/01/07 2011/01/09 2011/01/10 2011/01/11 2011/01/12 2011/01/13 2011/01/14 2011/01/15 2011/01/16 2011/01/17 2011/01/18 2011/01/19 2011/01/20 2011/01/21 2011/01/22 2011/01/23 2011/01/24 2011/01/25 2011/01/26 2011/01/27 2011/01/28 2011/01/29 2011/01/30 2011/01/31
2011/02/01 2011/02/02 2011/02/03 2011/02/04 2011/02/05 2011/02/06 2011/02/07 2011/02/09 2011/02/10 2011/02/11 2011/02/12 2011/02/13 2011/02/14 2011/02/15

### Browse by creation date

66 72 73 75 79 86 88 89 90 00 01 02 03 04 05 06 07 08 09 10
1966/12
1972/02 1972/08
1973/04
1975/03
1979/08
1986/05
1988/01
1989/12
1990/01 1990/07 1990/08
2000/06 2000/09 2000/11
2001/02 2001/03 2001/07 2001/10
2002/02 2002/03 2002/11
2003/03 2003/04 2003/05 2003/06 2003/07 2003/08 2003/09 2003/10 2003/11 2003/12
2004/01 2004/02 2004/03 2004/04 2004/05 2004/06 2004/07 2004/08 2004/09 2004/10 2004/11 2004/12
2005/01 2005/02 2005/03 2005/04 2005/05 2005/06 2005/07 2005/08 2005/09 2005/10 2005/11 2005/12
2006/01 2006/02 2006/03 2006/04 2006/05 2006/06 2006/07 2006/08 2006/09 2006/10 2006/11 2006/12
2007/01 2007/02 2007/03 2007/04 2007/05 2007/06 2007/07 2007/08 2007/09 2007/10 2007/11 2007/12
2008/01 2008/02 2008/03 2008/04 2008/05 2008/06 2008/07 2008/08 2008/09 2008/10 2008/11 2008/12
2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12
2010/01 2010/02

### Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z
Embassy Athens Embassy Asuncion Embassy Astana Embassy Asmara Embassy Ashgabat Embassy Ankara Embassy Amman Embassy Algiers Embassy Addis Ababa Embassy Accra Embassy Abuja Embassy Abu Dhabi Embassy Abidjan Consulate Amsterdam American Institute Taiwan, Taipei
Embassy Bujumbura Embassy Buenos Aires Embassy Budapest Embassy Bucharest Embassy Brussels Embassy Bridgetown Embassy Bratislava Embassy Brasilia Embassy Bogota Embassy Bishkek Embassy Bern Embassy Berlin Embassy Belgrade Embassy Beirut Embassy Beijing Embassy Banjul Embassy Bangkok Embassy Bandar Seri Begawan Embassy Bamako Embassy Baku Embassy Baghdad Consulate Barcelona
Embassy Copenhagen Embassy Conakry Embassy Colombo Embassy Chisinau Embassy Caracas Embassy Canberra Embassy Cairo Consulate Curacao Consulate Casablanca Consulate Cape Town
Embassy Dushanbe Embassy Dublin Embassy Doha Embassy Djibouti Embassy Dhaka Embassy Dar Es Salaam Embassy Damascus Embassy Dakar Consulate Dubai
Embassy Freetown
Embassy Guatemala Embassy Gaborone
Embassy Harare Embassy Hanoi Consulate Hamburg
Iran RPO Dubai Embassy Islamabad Consulate Istanbul
Embassy Jakarta Consulate Jerusalem Consulate Jeddah
Embassy Kyiv Embassy Kuwait Embassy Kuala Lumpur Embassy Kinshasa Embassy Kigali Embassy Khartoum Embassy Kampala Embassy Kabul
Embassy Luxembourg Embassy Luanda Embassy London Embassy Lisbon Embassy Lima Embassy Lilongwe Embassy La Paz Consulate Lagos
Mission USNATO Embassy Muscat Embassy Moscow Embassy Montevideo Embassy Monrovia Embassy Minsk Embassy Mexico Embassy Maputo Embassy Manama Embassy Managua Embassy Malabo Embassy Madrid Consulate Munich Consulate Montreal Consulate Monterrey
Embassy New Delhi Embassy Nassau Embassy Nairobi Consulate Naples
Embassy Ouagadougou Embassy Ottawa Embassy Oslo
Embassy Pristina Embassy Pretoria Embassy Prague Embassy Port Au Prince Embassy Phnom Penh Embassy Paris Embassy Paramaribo Embassy Panama Consulate Peshawar
Embassy Quito
REO Basrah Embassy Rome Embassy Riyadh Embassy Riga Embassy Reykjavik Embassy Rangoon Embassy Rabat Consulate Rio De Janeiro Consulate Recife
Secretary of State Embassy Stockholm Embassy Sofia Embassy Skopje Embassy Singapore Embassy Seoul Embassy Sarajevo Embassy Santo Domingo Embassy Santiago Embassy Sanaa Embassy San Salvador Embassy San Jose Consulate Strasbourg Consulate Shenyang Consulate Shanghai Consulate Sao Paulo
Embassy Tunis Embassy Tripoli Embassy Tokyo Embassy The Hague Embassy Tel Aviv Embassy Tehran Embassy Tegucigalpa Embassy Tbilisi Embassy Tashkent Embassy Tallinn
USUN New York USEU Brussels US Mission Geneva US Interests Section Havana US Delegation, Secretary UNVIE Embassy Ulaanbaatar
Embassy Vilnius Embassy Vienna Embassy Vatican Consulate Vladivostok
Embassy Windhoek Embassy Wellington Embassy Warsaw
Embassy Yerevan Embassy Yaounde
Embassy Zagreb

### Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
AF ASEC AM AE AG AR AS AU AORC AJ AMGT AGMT AFIN APER ABUD ATRN AEMR ACOA AEC AO AX AMED ADCO AODE AFFAIRS AC AL ASIG ABLD AA AFU ASUP AROC ATFN AVERY
BR BM BRUSSELS BL BK BA BO BILAT BTIO BEXP BH BE BX BU BIDEN BY BG BF BB BC BBSR
COUNTER CH CO CG CE CA CASC CU CLINTON CI CVIS CDG CIA CACM CDB CS CBW CD CV CMGT CJAN CF CN CAN CIS CM CONDOLEEZZA COE CR CY CTM COUNTRY CLEARANCE CPAS CWC CT CKGR CB CACS COM CJUS CARSON COUNTERTERRORISM
DA DJ DEAX DR DHS DOE DEA DK DISENGAGEMENT DS DOD
ECON EG EAID EFIN ELAB EUN ETRD EU EXTERNAL ENRG ETTC EPET EINV EMIN ECIP ECPS EINDETRD EAGR EN EZ ER ET ES EUC EI EAIR EIND EWWT ELTN EREL ECIN EFIS EINT EC ENVR ECA ELN EINVETC ENIV EINN ENGR EUR ESA ENERG EK ELECTIONS ECUN EINVEFIN
FR FJ FINR FAO FTAA FREEDOM FI FARC FBI FMLN
GTMO GOI GM GG GV GH GA GE GT GR GTIP GCC GAZA GZ
HILLARY HA HU HR HUMAN HO HYMPSK HURI HK HSTC
IS IR IZ INRB IAEA IN IT ID IO IV ICTY IQ ICAO INTERPOL IPR IRAJ INRA INRO IC IIP ITPHUM IWC ISRAELI IRAQI ICRC IMO IF ILC IEFIN INTELSAT IL IA IBRD IMF ITALY ITALIAN
JAMES JO JA JOSEPH JP JOHNNIE JUS
KDEM KJUS KCOR KOLY KIPR KNNP KU KWBG KPAL KN KS KZ KAWK KISL KPAO KCRM KSEC KGHG KIFR KTFN KDRG KV KSUM KWAC KAWC KDEMAF KFIN KGIC KTIP KOMC KHLS KSPR KGCC KPIN KG KBIO KHIV KSCA KE KFRD KPKO KNUC KMDR KPLS KUNR KIRF KIRC KACT KRAD KCOM KMCA KHDP KVPR KDEV KWMN KTIA KPRP KCIP KCFE KOCI KTDB KMRS KLIG KBCT KICC KGIT KSTC KPAK KNEI KSEP KPOA KFLU KNUP KNNPMNUC KO KTER KHUM KRFD KBTR KDDG KWWMN KFLO KSAF KBTS KPRV KMPI KNPP KNAR KWMM KERG KTBT KCRS KRVC KREL KR KPWR KMIG
LY LE LG LH LU LI LO LOG LT
MARR MOPS MCAP MNUC MZ MO MASS MY MEPP MA MR ML MX MIL MTCRE MPOS MOPPS MTCR MAPP MU MG MASC MCC MK MTRE MP MDC MAR MEPI MRCRE MI MT MQADHAFI MD MAPS MUCN MASSMNUC
NATO NI NZ NG NU NO NL NIPP NPT NE NS NAR NPG NK NSG NA NT NASA NGO NP NSF NATIONAL
OTR OVIP OVP OREP ODIP OPDC OPRC OIIP OFFICIALS OSAC OAS OEXC OFDP OTRA OSCE OPIC OECD OPCW OSCI OIE
PREL PGOV PTER PHUM PINR PAK PREF PL PBTS PHSA PARM PO PINS PK PINT PROP PE POGOV PINL POL PBIO PSOE PKFK PGOF PARMS PA PM PMIL PTERE PF PALESTINIAN PY PGGV PNR POV PAO PFOR PHALANAGE PARTY PNAT PROV PEL PINF PGOVE POLINT PRAM POLITICS PEPR PSI PU POLITICAL PARTIES PECON
QA
RS RU RO RW REGION RP RIGHTS RICE ROBERT RF RFE
SP SY SOCI SCUL SNAR SA STEINBERG SENV SF SO SR SG SW SU SL SMIG SN SHUM SZ SYR ST SANC SC SAN SIPRS SK SH SI
TIP TERRORISM TI TU TC TRGY TX TS TBIO TW TSPA TH TR TT TO TFIN TD TSPL TZ TPHY TK TNGD
UN US UK UG UNSC UP USEU UNMIK UV UZ UY UNGA UNO USUN UE UNESCO UAE UNEP USTR UNHCR UNDP UNHRC USAID UNCHS UNAUS
VZ VT VE VTPREL VN VM
WTRO WTO WA WI WMO WTRQ WHO WWARD WB WBG
XF XA XG XT XM XR XS XL XK XH XY XC XZ XW XD
YE YM YI
ZI ZU ZP ZR ZB ZF ZK ZANU ZOELLICK ZA

### Browse by classification

CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

### Community resources

Follow us on Twitter Check our Reddit Twitter this Digg this page Contact us on IRC

courage is contagious

### Viewing cable 09TRIPOLI71, AL-QADHAFI'S FEINT: LIBYAN OIL NATIONALIZATION UNLIKELY REF: A) 08 TRIPOLI 474, B) 08 TRIPOLI 498, C) 08 TRIPOLI 563, D) 08 TRIPOLI 597, E) TRIPOLI 40 TRIPOLI 00000071 001.2 OF 003

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:

- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09TRIPOLI71.

Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09TRIPOLI71 | 2009-01-30 17:05 | 2011-02-01 21:09 | CONFIDENTIAL | Embassy Tripoli
Appears in these articles: http://www.telegraph.co.uk/news/wikileaks-files/libya-wikileaks/

`

    VZCZCXRO9531
    OO RUEHDE RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
    DE RUEHTRO #0071/01 0301716
    ZNY CCCCC ZZH
    O P 301716Z JAN 09
    FM AMEMBASSY TRIPOLI
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 4387
    INFO RUEHRB/AMEMBASSY RABAT 0820
    RUEHTU/AMEMBASSY TUNIS PRIORITY 0745
    RUEHAS/AMEMBASSY ALGIERS PRIORITY 0877
    RUEHHH/OPEC COLLECTIVE
    RUEHZL/EUROPEAN POLITICAL COLLECTIVE
    RUEHTRO/AMEMBASSY TRIPOLI 4911

` `

    C O N F I D E N T I A L SECTION 01 OF 03 TRIPOLI 000071

    SIPDIS

    DEPT FOR NEA/MAG; DEPT PLEASE PASS COMMERCE FOR NATE MASON;
    ENERGY FOR GINA ERICKSON

    E.O. 12958: DECL:  1/30/2019
    TAGS: ENRG EPET ECON EINV PREL EFIN PGOV LY
    SUBJECT: AL-QADHAFI'S FEINT: LIBYAN OIL NATIONALIZATION UNLIKELY  REF: A) 08 TRIPOLI 474, B) 08 TRIPOLI 498, C) 08 TRIPOLI 563, D) 08 TRIPOLI 597, E) TRIPOLI 40  TRIPOLI 00000071  001.2 OF 003

    CLASSIFIED BY: Gene A. Cretz, Ambassador, U.S. Embassy - Tripoli, U.S. Dept of State. REASON: 1.4 (b), (d)

    ¶1. (C)  Summary. During a recent video conference with Georgetown University students, Muammar al-Qadhafi suggested that Libya and other oil exporting states could nationalize their oil production in view of sharply plummeting petroleum prices.  Several days later, however, a sensior MFA official assured the visiting Spanish King's delegation that Libya does not intend to do so.  In typical fashion, al-Qadhafi's call for nationalization was ill-defined and left considerable room for interpretation.  Industry experts in Washington and Libya have not entirely dismissed the possibility that the GOL could nationalize its oil and gas sector (Libya did so in 1972); however, they do not currently judge it to be a serious threat and are waiting to see whether legislation proposing such an initiative is introduced in advance of the upcoming session of the General People's Congress.  Informed contacts view the call for nationalization as a tactical move to:
    1) leverage the expected re-negotiation of existing contracts with international oil companies (IOCs');
    2) prompt IOC's operating in Libya to contribute to the U.S.-Libyan claims compensation fund;
    3) establish a context for Libya's potential unilateral cuts in production of oil below levels dictated by OPEC, and;
    4) prepare the Libyan people for the fact that this year's GOL budget, which will be introduced at the General People's Congress session, will be adversely impacted by falling oil revenues and the global financial crisis.  The GOL is in the midst of a painful recalculation of its 2009 national budget to reflect lower oil revenues. Suggesting nationalization - an idea al-Qadhafi attributed to members of the local-level Basic People's Congresses and can therefore disavow easily - clearly signals the extent to which sagging oil prices and the global financial crisis have hurt oil-dependent economies like Libya's, helping pre-empt criticism from abroad if/when Libya makes further unilateral production cuts below OPEC-dictated levels and from regime elements when big ticket development projects are scaled back or cut.  Al-Qadhafi's real intent may have been to shift the goalposts of debate so that the steps he ultimately takes seem comparatively palatable.  End summary.

    AL-QADHAFI THROWS A CURVEBALL

    ¶2. (C)  During a wide-ranging video conference with Georgetown University students on January 21, Muammar al-Qadhafi raised the topic of oil, saying " ... oil-exporting countries might opt for nationalizations due to the sharp fall in oil prices".  His speech was foreshadowed by articles in state-run newspapers, later picked up by Reuters, saying that members of the Basic People's Congresses (the lower part of the pyramid scheme of legislative committees and congresses that form the GOL) had called for nationalization.  Noting sharply plummeting oil prices, al-Qadhafi suggested that oil production should be temporarily curtailed or stopped altogether to spur higher prices and suggested that a price point of USD 100/barrel was needed to underwrite Libya's ambitious infrastructure development projects.  Libya's former senior representative to OPEC, Abdullah al-Badri, told the press on January 23 that nationalization could be "in the offing" and suggested that events in Gaza may have partly prompted the proposal.  At a National U.S.-Arab Chamber of Commerce lunch in Houston on January 27, Libya's Ambassador to Washington, Ali Aujali, said the GOL had not ruled out nationalization and characterized a USD 100/barrel price point as "fair".  The NOC directed oil companies producing in Libya to cut production by 270,000 barrels per day in compliance to an output-cutting decision adopted by OPEC.

    ¶3. (C) During the recent visit to Tripoli of Spanish King Juan Carlos I, al-Qadhafi was quoted as saying that " ... if Libya ends up taking this decision, it will be because we don't have any choice".  Despite the public threats, MFA Secretary for Arab Affairs (U/S-equivalent) Muhammad Siala told the Spanish delegation that oil production would not be nationalized.  In remarks to Spanish daily "El Pais", Spanish energy giant Repsol's President,  Antoni Brufau, speculated that al-Qadhafi had been "thinking out loud" (further details septel).  A well-connected contact in Tripoli xxxxxxxxxxxx told the Ambassador on January 29 that Ghanem had not taken the press reports or al-Qadhafi's remarks seriously and did not consider nationalization of Libya's oil production as a serious or plausible possibility.  Ghanem was "extremely frustrated" that he had not been consulted or informed before al-Qadhafi gave his remarks, and told our contact he was "fed up" and waiting for an opportunity to leave his position at the NOC.

    GOL WANTS TO RENEGOTIATE EXISTING PRODUCTION CONTRACTS, INCREASE  TRIPOLI 00000071  002.2 OF 003   ITS SHARE

    ¶4. (C) Part of the issue may be definitional.  Although al-Qadhafi has used the phrase "nationalization", he may in fact be signaling more aggressive efforts by the GOl and NOC to secure greater shares of oil produced under existing contracts. During 2008, the NOC renegotiated four existing production contracts with Italy's ENI, Canada's Petro-Canada, a consortium of U.S. Occidental/ Austrian OMV, and a European consortium of Spanish Repsol/French TOTAL/Austrian OMV/ Norwegian Hydro (reftels A, B, C, D).  According to a recently-released NOC report, the renegotiated contracts increased the GOL's earnings by USD 5.4 billion last year; the four companies involved also paid USD 3 billion in front-end bonuses, increasing the GOL's take. The renegotiated terms brought those contracts in line with Libya's preferred exploration and production sharing agreement (EPSA) rubric, under which IOC's already producing in Libya have extended their contracts, paid sizeable bonuses and dramatically reduced their production shares to the neighborhood of 10-15 percent.  The NOC has repeatedly said it wants to renegotiate its old (i.e., non-EPSA) contracts along EPSA-IV terms, which would allow it to have more than an 80 percentage share.

    ¶5. (C) The Oasis Group (ConocoPhillips, Marathon, Hess and Occidental), Repsol, Wintershall and Total remain as the foreign producing companies that have not signed the new agreements to align their share percentages with the most recent EPSA-IV configuration.  The Oasis Group, whose constituent members' assets and production were nationalized in 1972, agreed in 2005 to pay Libya USD 1.8 billions to return to their previous acreage, which had been held in trust under a "stand fast agreement" for 19 years during the period U.S. sanctions were in effect against Libya.  Oasis' contract is for 25 years; the NOC holds a 59.2 percent share, ConocoPhillips and Marathon each have 16.33 percent each, and Hess has an 8.16 percent share. The GOL would like to renegotiate Oasis' contract to increase its share, and has informally signaled that it intends to do so.

    ¶6. (C) At the same time, industry journals report that the re-negotiated contracts with IOC's will entail investment in exploration and production of some USD 22 billion over the next 5-10 years.  Libya would bear up to 50 percent of that financial burden, at a time when it may already have to scale back its infrastructure development projects in light of falling revenues (ref E).  The GM of Canada's Verenex (one of the few companies to find new oil under new EPSA's) said nationalization "did not make sense" since the NOC would have to bear bear 100 percent of development and production costs.  By way of example, the NOC only bears 50 percent of Verenex's development costs, but gets 87 percent of production revenues.

    CLAIMS COMPENSATION FUND CONTRIBUTIONS

    ¶7.  (C)  In addition to providing leverage for potential renegotiation of existing contracts, the threat to nationalize may in part be an attempt to prompt IOC's operating in Libya to contribute to the U.S.-Libya claims compensation fund that was implemented in October 2008.  Marathon's General Manager (GM) told the Ambassador that the NOC Chairman Shukhri had begun soliciting IOC's again about two weeks ago for contributions to the fund established to compensate U.S. victims of acts of terrorism authored by Libya.  The NOC had previously targeted only companies that were producing oil; however, in its most recent approach it also touched IOC's that are in the exploration phase and have not yet begun producing oil. Representatives of Occidental said the company was concerned about press reports, but not overly so.  Oxy has received private assurances from Ghanem that nationalization is not the in the offing, and views al-Qadhafi's remarks as posturing to pressure companies to contribute to the fund.  GM's of major IOC's here believe that the first-tier producers, who have so far abided by an informal agreement not to accede to demands for contributions, will continue to hold the line; however, there is concern that second-tier producers and perhaps oilfield supply and services companies may buckle under pressure from the NOC and choose to contribute.  A second meeting between IOC GM's and Ghanem that was to have occurred on January 28 has been postponed until February 1 or 2, according to Occidental's GM.

    PORTENT OF FURTHER UNILATERAL PRODUCTION CUTS BY LIBYA?

    ¶8. (C) Remarks by al-Qadhafi and other senior GOL officials may also have been intended to establish a context for potential unilateral cuts in Libyan production of oil below levels dictated by OPEC.  Three OPEC production cuts since September,  TRIPOLI 00000071  003.2 OF 003   most recently a 2.2 million barrel per day cut that went into effect January 1, have failed to slow a slide that has left crude oil prices about 70 percent below the mid-July 2008 price of USD 150 per barrel.  Libya directed IOC's in Libya to cut their production by 270,000 barrels per day (Libya's total production is 1.7-1.8 million barrels/day), more than it needed to account for its share of the overall OPEC cut.  In his Georgetown remarks, al-Qadhafi flatly said that Libya would not adhere to OPEC's quotas " ... because our livelihood depends on oil".  He also suggested that further unilateral production cuts or perhaps even a temporary production freeze could be adopted, although either of those options would result in further declines in revenue at a time when the GOL can ill afford it.

    CREATING A DIVERSION IN ADVANCE OF THE UPCOMING GENERAL PEOPLE'S CONGRESS?

    ¶9. (C) Finally, al-Qadhafi's remarks may be part of an effort to  prepare regime figures and, to a lesser extent, the Libyan people for the fact that this year's GOL budget, to be introduced at an upcoming session of the General People's Congress (GPC), will be adversely impacted by falling oil revenues and the global financial crisis.  As reported ref E, the session planned for January was postponed, in part because the GOL has had to re-calculate the national budget to reflect dramatically reduced oil revenues.  A senior MFA official told us that al-Qadhafi, unhappy that widely-publicized infrastructure and development projects designed to demonstrate the Jamahiriya system's benefits, tried to secure funds from Libya's newly-constituted Sovereign Wealth Fund (SWF) to cover budget shortfalls and avoid delaying the projects.   The President of the Libyan Investment Authority, which administers the SWF, told the Ambassador that a recently-adopted law prohibits such raids on the fund, and al-Qadhafi appears to have been deterred from doing so (at least for now).

    ¶10. (C) Comment: Famous for saying the unexpected (a favorite local saying is "from Libya comes the new"), al-Qadhafi did not disappoint with his threat to nationalize Libya's oil production.  As with similar dramatic, headline-grabbing statements on various other subjects in the past, though, much of what he says and does represents tactical maneuvering rather than a sincere expression of intent.  While it is never wise to rule out the possibility of seemingly irrational decisions by the GOL, we are not inclined to believe that nationalization is being seriously considered.  Floating the idea helps leverage the GOL's position with respect to renegotiating existing oil production contracts and (potentially) garnering contributions to the claims compensation fund.  More important in the immediate sense, though, is that it clearly signals the extent to which sagging oil prices and the global financial crisis have hurt oil-dependent economies like Libya's, helping pre-empt criticism from abroad if/when Libya makes further unilateral production cuts below OPEC-dictated levels and from regime elements when big ticket development projects are scaled back or cut at the upcoming session of the GPC.  In that regard, al-Qadhafi's real intent may have been to shift the goalposts of debate so that the steps he ultimately takes seem palatable by comparison with the specter of what could have been. Well-connected businessman xxxxxxxxxxxx told the Ambassador that he doubted that the GOL would "make the same mistake twice" by nationalizing oil production again, and highlighted the fact that al-Qadhafi attributed authorship of the idea to the BPC's, which would make it easier for him to later disown it.  Tellingly, MFA A/S-equivalent for the Americas Ahmed Fituri told the Ambassador on January 28 that he did not expect nationalization to occur, and had attended a meeting earlier that day in which participants discussed opening a consulate in Houston, in part to better facilitate travel to/from Libya by U.S. oil representatives.  End comment.
    CRETZ

`