In the second of the current April , the Undersecretary of the Iraqi Oil ministry Zia Jafar confirmed that the coming period will witness the signing of the Iraqi oil pipeline agreement with Jordan. He added in a statement to the sidelines of the « The 3rd Jordan International Energy Summit» in Amman, that «Iraqi Prime Minister Haider al-Abadi and Oil Minister Jabbar Allaibi are interested in the completion of this project as soon as possible», pointing to «intensify negotiations with the investing company and reached to an agreement with it on all technical and economic issues ».
He added: «We have reached to an advanced stage and we got preliminary approval from the Iraqi Council of Ministers to establish the project, and it will be followed by a meeting of the Iraqi Oil Ministry and Finance department of the Iraqi Council of Ministers with counterparts in Jordan next week to review the memorandum of understanding signed earlier between the two sides». Jafar assured «the possibility to make some adjustments according to the new developments, and after reviewing the agreement and approval of the two sides, the contract will be signed in its final form», adding that «this process will not take more than two months, and then it will begin the implementation of the project».
He stressed that «Jordan and Iraq will not bear the additional burden of the cost of the project, amounting to about $ 5.6 billion, and it will be borne by Global Mass Company invested in the project, which will restore costs through wage to be paid by the Iraqi government». He said that the meetings will be held between the Iraqi Oil Ministry officials and legal department in the Iraqi Council of Ministers and their counterparts in Jordan next week to review the memorandum of understanding previously signed between the two countries under the previous government, in addition to the possibility of amendments to some of the “things” in the Convention according to the new developments. The Iraqi official said that after working on a review of the memorandum and fix the approval on it between the Jordanian and Iraqi sides, we will “contact again with the Iraqi Council of Ministers and the investor to sign the contract in the ultimate picture.”
The pipeline project ensures the transport extracted crude oil from the fields of Basra, south of Iraq, to the city of Aqaba in southern Jordan, where an area is extending a distance of $ 1700 km, through two phases, the first extending from Basra to Haditha in western Iraq, and the second extends to be ended at the port Aqaba to export oil to the rest of the world.
The project of great importance in terms of strengthening Arab economic cooperation, where Iraq and the Hashemite Kingdom of Jordan are hoping so much on it to achieve economic benefits, according to experts, it is for Iraq, a permanent port for the export of oil through the Jordanian port of Aqaba, where this project opens the way for Iraq to increase its oil exports to global markets by one million barrels per day through the port of Aqaba. Also this tube is a successful alternative to Iraq in the case of closing the Strait of Hormuz by Iran against the backdrop of political and military tensions in the region or at the very least to make navigation in it is unsafe. Also Arab Gulf countries will be able to extend an oil pipeline through Jordan and then to world markets, and thus the Iranian threat to close the Strait of Hormuz to oil exports will be ended.
As for Jordan, it ensures its needs of crude oil at a lower cost and easy to dispense with tankers that are carrying out the transport operations currently, and the pipeline will provide Jordan on their needs of crude oil by a hundred thousand barrels per day, so the Jordan will be able to diversify its energy sources, in addition to obtaining a material revenues in exchange of passing the pipeline on its territories and export to other countries.
The extension of Iraqi crude oil pipeline to Jordan will have great positive and plentiful effects , through job creation and operation of construction companies in Iraq, Jordan, and open more financing opportunities from banks in the two strategic projects and the sustainability of the flow of energy to Jordan, and reopen Iraqi factories in Jordan, which they were stopped as a result of unfavorable conditions in Iraq and thus establish common interests and promote joint cooperation in all trade, investment, tourism and logistics fields.
The economic and trade challenges and political events in the region calls for promotion of relations of the two countries at various levels to strengthen the basis of common economic interests of Jordan and Iraq in both directions through more Iraqi investments in Jordan and the resettlement of Jordanian investments in Iraq, and bilateral investments through joint ventures.
Politically, the oil project will restore the Iraqi – Jordanian relations to its previous ones with touchable practical procedures noting that the two countries are still looking at each other as a strategic depth, and that the benefits of all partnerships are reflected on them without the slightest doubt noting that Iraq and Jordan are aware of that. Jordan and Iraq were always the strategic depth and the back and support for each other. The strong recoverable Iraq also constitutes a depth at the level of strategic relations and geopolitics of the Arab Mashreq.
This project will also enable Jordan to carry out a vital role to bring back Iraq to the Arab house, as it was the case always, and also Jordan’s status and relations qualify it to do an important role in trying to complete Iraqi reconciliation, and to assist the Government of Iraq to implement its vision in this area.
In the event of the signing of the oil agreement on time, it will be the start of a new phase of the relationship between the two countries. Reflecting a new turning point in the relationship between them, and to ensure greater cooperation and partnerships of the Republic of Iraq and the Hashemite Kingdom of Jordan.
The Iraqi Studies Unit
Translated by: Mudhaffar al-Kusairi
Rawabet Center for Research and Strategic Studies