Cablegate: Exxonmobil Tells Gov't It Intends to Sell

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R 131510Z OCT 06
FM AMEMBASSY ABIDJAN
TO RUEHC/SECSTATE WASHDC 2036
RUEATRS/DEPT OF TREASURY WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUEHZK/ECOWAS COLLECTIVE
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UNCLAS ABIDJAN 001153

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STATE PASS TO USTR AFRICA OFFICE

E.O. 12958: N/A
TAGS: ENRG EINV ASEC PREL IV ECON
SUBJECT: EXXONMOBIL TELLS GOV'T IT INTENDS TO SELL
DISTRIBUTION ARM

Please Treat as Business Confidential. No Dissemination
Outside USG

1. (SBU) ExxonMobil Regional Director John A.C. Bell, along
with Regional Manager Frederic Dauvergne and local Director
General Manar Sall met with EconChief on October 10 to
discuss the company's announcement to the government of Cote
d'Ivoire that it intends to sell its stake in its Ivorian
fuel distribution (downstream) network, which is comprised of
62 service stations, part ownership and management of the
offshore fuel unloading terminal and related infrastructure.
ExxonMobil signed an agreement on October 2nd with Libyan
parastatal Tamoil to sell its Ivorian assets in a package
involving similar downstream holdings in Cameroon, Senegal,
Gabon, Kenya and Reunion, in a move that comes on the heels
of a parallel sale to Tamoil of the American company's
distribution networks in 14 other countries in 2005. The
entire six-country package is worth, according to ExxonMobil,
"many hundreds of USD millions."

2. (SBU) Bell characterized the move as related to its
company-wide efforts to centralize back-office functions.
Smaller African markets with regulated fuel prices, according
to Bell, don't fit the company's business model. Tamoil, by
contrast, has expressed a commitment to investing in Cote
d'Ivoire (along with the other countries in which it will
soon be a major player) and to grow the business. Local
employees' contracts will be moved to the new company.
Retrenchments are possible, according to Bell, but experience
in Niger, where Tamoil bought the ExxonMobil downstream
business in 2005, was positive: 60-80% of employees and
management staff have been retained.

3. (SBU) ExxonMobil had conducted a limited tender bid for
the six properties, hoping to sell all in a single package,
but offering PETROCI (parastatal Ivorian company) and
PetroGabon (parastatal Gabonese firm) the option of bidding
on the assets found in their respective countries. Tamoil's
bids on all six companies were plainly superior to any
others. Petroci complained at the time and asked for the
opportunity to rebid, and made references to ExxonMobil's
business license. Since that time, however, the company has
not received any hostile communications from Petroci.

4. (SBU) Bell's team had met with the Minister of Mining and
Energy, Leon Emmanuel MONNET on Monday, October 9, and
brought along a representative from Tamoil, as planned.
ExxonMobil, fresh on the heels of settling the decades-long
Centaures Routiers case, doesn't believe it has the
obligation to obtain Ivorian government approval, but wants
to conduct its disengagement on the downstream side of its
business in Cote d'Ivoire gracefully, "through the front
door." Surprisingly to Bell and his team, MONNET included a
representative from Petroci in the meeting. Despite this,
the meeting went well. In an afternoon meeting on Tuesday,
October 10th with Deputy Cabinet Director Madame Ziringnon
Sarata OTTRO TOURE things went similarly well (Note: Ottro
Toure is married to the head of Cote d'Ivoire national
refinery, who is an elder in President Gbagbo's family. End
Note). Late in the afternoon, the ExxonMobil team was
abruptly recalled to a 6pm meeting with the Ministry of Mines
and Energy, but company officials called EconChief afterwards
and said that meeting, too, went well.

5. (SBU) ExxonMobil officials here indicate that Tamoil's
influence here may be strong enough to overcome any potential
lingering resentments related to Petroci's failed bid. At
this juncture, the road out of Cote d'Ivoire for the company
appears smooth, but we will continue to monitor the process
closely.
Valle

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