Jordan to get 30,000 bpd of Iraqi crude at reduced prices: premier

Aug 27, 2006, 19:25 GMT

Amman - Jordanian Prime Minister Marouf Bakhit said Sunday that the Iraqi government had agreed to supply Jordan with 30,000 barrels per day (bpd) of crude at 'preferential prices'.

He told the lower house of parliament that the most important results of his visit to Iraq earlier this month was 'a memorandum of understanding to supply Jordan with 30,000 bpd of Iraqi crude oil at preferential prices and an agreement to build an oil pipeline between Iraq and the port of Aqaba' on the Red Sea.

'We have also agreed to increase Jordan's imports of Iraqi crude gradually from 30,000 to 60,000 bpd,' he added.

Bakhit said: 'Jordan cannot import all of its energy requirements, amounting to 100,000 bpd, from Iraq at the start because we have to mix Iraqi crude with other oils' during operations at the country's only refinery in Zarqa, 30 kilometres east of Amman.

He declined to disclose details on the pipeline, but referred to an agreement concluded with the regime of former president Saddam Hussein to construct such a facility.

Jordan depended almost entirely on Iraqi crude between August 1990 and March 20, 2003, when oil supplies were severed on the eve of the US-led invasion of Iraq.

The previous Iraqi regime used to supply the Hashemite Kingdom with crude at half price.

Saudi Arabia, Kuwait and the United Arab Emirates volunteered to supply Jordan with its energy requirements, but the shortage of oil donations last year caused Jordan's public deficit to rise sharply.

Bakhit made the remarks at the start of a parliamentary discussion on a bill with increased spending to cover a growing budget gap due to soaring oil prices on the world market and rising security expenses.

'Despite these adverse developments, Jordan's gross domestic product (GDP) managed to grow at a rate of 6.7 per cent in the first half of the year,' Finance Minister Ziyad Fariz said.

The country's unemployment rate fell to 13.1 per cent this year from 14.8 per cent in 2005, while inflation remained within the projected rate of 6 per cent, he said.

Fariz reported a 13 per cent increase in Jordan's reserves of foreign currencies, to 5.3 billion dollars from 4.7 billion dollars.