OVER 40 TRUCKS OF IRAQI OIL HAVE ARRIVED AT

C O N F I D E N T I A L AMMAN 004217 SIPDIS SIPDIS STATE FOR NEA/ELA, NEA/I, AND EEB E.O. 12958: DECL: 10/17/2017 TAGS: EPET ENRG ECON PGOV JO IZ SUBJECT: OVER 40 TRUCKS OF IRAQI OIL HAVE ARRIVED AT JORDAN'S REFINERY; REMAINING SHIPMENTS STILL STALLED REF: A. EMAIL VAN MAERSSEN-BROWN-WINTERS-MUSTAFA 10/16/07 ¶B. BAGHDAD 3312 ¶C. AMMAN 3819 ¶D. AMMAN 3626 ¶E. AMMAN 3557 Classified By: Ambassador David Hale for reasons 1.4 B and D ¶1. (SBU) During October 17 meetings with Econoff, senior officials at the Jordanian Ministry of Energy and Mineral Resources (MEMR) confirmed that 40 trucks carrying approximately 1,200 metric tons of Iraqi crude oil had reached the Jordan Petroleum Refinery Company (JPRC) in Zarka as of September 26, 2007, based on the 2006 agreement between the Iraqi and Jordanian governments (reftels). MEMR Director of Industrial Production Farouk Hiyari indicated that an additional two trucks transporting about 50 metric tons may have also entered Jordan within the past day. Per ref A, these shipments represent approximately 25 percent of the 166 trucks loaded in Kirkuk between September 12 and 24. ¶2. (C) Regarding the alleged diversion of shipments to Kurdistan and/or Iran noted in ref A, MEMR Secretary General Khaldoun Qutishat said that the Government of Jordan (GOJ) had heard from Iraq's State Oil Marketing Organization (SOMO) and the Iraqi government that some oil tankers had been found in Kurdistan, but subsequent investigations indicated that those tankers were not part of the fleet bound for Jordan. In the presence of Econoff, Qutishat called Director General Gassan Farkouh of the Iraqi-Jordanian Land Transport Company (IJLTC),who confirmed that the remaining 126 trucks were still secure under IJLTC's control in Iraq. Farkouh anticipated that approximately 30 tankers would leave for Jordan overnight. Qutishat added an "inshallah" caveat that nothing was definite until the vehicles had actually crossed the border. He commented that, at this point, the GOJ really did not know the status of the remaining trucks, as it could only rely on IJLTC's word until further investigations were undertaken. ¶3. (C) Given past security and technical problems, Qutishat noted that the GOJ had previously explored various shipping options with SOMO, including shipment by sea from Ceyhan, Turkey, an arrangement that Jordan would prefer. In a letter dated July 25, 2007, however, SOMO told the GOJ that no oil from Kirkuk was available to be shipped from Ceyhan port on a continuous basis. Qutishat said that the GOJ would welcome any USG assistance in facilitating maritime shipping arrangements with SOMO. ¶4. (C) Hiyari confirmed that Jordan is receiving a fixed discount of $18 per barrel below the fluctuating market price for the Iraqi crude, but once transport costs of $100/metric ton are factored in, the rate is equivalent to international market prices. Qutishat also noted that the Iraqi government had verbally promised an additional $4/barrel discount to compensate for the added charges of shipping out of Kirkuk vice Saniyah, but no written or official correspondence had been received to implement the new price. ¶5. (C) Comment: MEMR officials appear frustrated with the ongoing problems that have hindered deliveries of Iraqi oil to Jordan, which at some point may cause Jordan to reevaluate the arrangement, according to Qutishat. All recognize, however, the political importance of the oil deal for the two countries, which continue to sustain efforts to find solutions and fully implement the agreement. Visit Amman's Classified Website at: http://www.state.sgov/p/nea/amman Hale