DCM'S MEETING WITH ENERGY MINISTER BATAYNEH

C O N F I D E N T I A L AMMAN 001234

SIPDIS

E.O. 12958: DECL: 02/24/2013
TAGS: EPET EAIR ETTC JO
SUBJECT: DCM'S MEETING WITH ENERGY MINISTER BATAYNEH

Classified By: A/DCM Doug Silliman, reasons 1.5 (b,d)


1. (u) Following are info items from the DCM's February 24
meeting with Energy Minister Mohammed Batayneh:


2. (c) Gasoil shortage: Due to unseasonably cold weather,
local consumption of gasoil and fuel oil has risen higher
than expected. Normally, Jordan stockpiles gasoil and fuel
oil reserves in the summer for winter use, but the heavy
demand this winter has led to a shortfall in stocks.
Batayneh said he was issuing a tender to procure an
additional 20,000 tons of gasoil to meet the additional needs.


3. (sbu) Jet Fuel Price Hike: Batayneh confirmed local
press reports that the GOJ had increased jet fuel prices. He
noted, though, that the hike only applied to foreign
commercial carriers; that the new price was still below the
price in 2000; and that the new price was still below the
average price of jet fuel in the region.


4. (c) Request for Oil/Trade Protocol Increase: Batayneh
denied recent local press reports that Jordan had requested a
10% increase in quantities shipped under the Jordan-Iraq oil
protocol for 2003.


5. (sbu) Independent Power Project: Despite a pullout in
late 2002 by Tractebel from the Independent Power Project in
Al Samra, Batayneh said the project was now back on track.
He said a new RFP had been sent to prospective investor
groups headed by Saudi AG, ABB, CCC, and a U.S. firm,
Northwest. Batayneh said he expected the tender to be
awarded by the end of April 2003.


6. (c) Iraq-Zarqa Oil Pipeline: Batayneh said financial
details were now being submitted by firms interested in
bidding on the oil pipeline. He said he hoped to have the
tender awarded in March (note: this project has been
re-tendered at least three times after bidders failed to
commit to financing citing political risk factors. End
note.) Batayneh confirmed that the terms of the RFP include
building of infrastructure on the Iraqi side of the border
(storage tanks and a feeder facility for tanker trucks) and
turning over the facilities to the Iraqi government prior to
the beginning of commercial operations. He admitted that
such a provision might complicate the bidding process in the
current environment.


7. (c) Press Management: Batayneh noted that managing
press interest in the oil sector in the run-up to possible
military activity in Iraq was becoming increasingly
challenging. He said that, despite the fact that Jordan is
comfortable with its levels of reserves, he could not control
rumors on the street that gasoline and diesel rationing was
imminent - rumors he said were patently false. He said it
would be critical in the coming weeks to keep oil issues out
of the press, for fear that Iraq might seize on mounting
public concern and cut off access to oil earlier than a
conflict scenario would allow for. On this front, he said he
had the full backing of the cabinet to make himself the only
point of contact for the press on oil issues.
GNEHM