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DE RUEHTRO #0319/01 1061554
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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
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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