Jordan occupies a strategic location in the Middle East, and is an important crossroads for regional energy integration. Jordan also is a potential alternative transit center for oil and gas exports from the Persian Gulf region.

Note: information contained in this report is the best available as of June 2001 and can change.

GENERAL BACKGROUND
Jordan underwent a leadership transition in 1999, with the Hashemite monarchy passing from King Hussein bin Talal, who had ruled Jordan for 46 years, to his oldest son Abdallah. King Hussein had changed the line of succession in January 1999, replacing his brother Hassan, who had been named Crown Prince in 1965, with Abdallah.  In June 2000, King Abdallah appointed a U.S. educated economist, Ali Abu Raghab, as prime minister, with a mandate to accelerate economic reforms.

After several years of sluggish growth, Jordan's economy is beginning to stage a recovery. Growth in real gross domestic product (GDP) in 2000 was 3.2%, up from only 1.6% in 1999.  Real GDP growth for 2001 is projected at 3.7%.  While Jordan had hoped for a surge in growth as a result of its peace treaty with Israel in 1994, the collapse of Arab-Israeli peace negotiations in late 2000 has dampened hopes for regional economic cooperation in the near future.  Exports of goods to neighbors Iraq and Saudi Arabia also are important to Jordan's economy, and growth in regional exports is helping to further Jordan's economic recovery.  Remittances from Jordanian workers in the Persian Gulf countries also are very important to Jordan's balance of payments.

Jordan was admitted to membership in the World Trade Organization in April 2000, after agreeing to a package of trade and investment liberalization measures, as well as improvement in protections for foreign-owned intellectual property. The United States and Jordan concluded a bilateral free trade treaty in October 2000.  Ratification of the treaty currently is pending in the U.S. Senate.

A privatization program has been undertaken to reduce the Jordanian government's stake in sectors of the economy previously dominated by state-controlled firms.  The Jordanian government sold a 40% stake in the Jordan Telecommunications Company to France Telecom in 2000, in the most significant privatization to date.  Oil and electric power generation, as well as the country's large phosphate and potash industries, also are targeted for privatization. As part of its preparations for admission to the WTO, Jordan lifted in 2000 most limits on foreign ownership of formerly state-owned companies.

On the diplomatic front, Jordan has made great progress in recent years in restoring normal relations with the Arab states of the Persian Gulf.  Relations were strained as a result of Jordan's perceived tilt toward Iraq after the invasion of Kuwait in 1990. A number of agreements also have been concluded between Jordan and Syria in recent years, including agreements for a linkage of their electric grids and a dam on the Yarmouk river.

OIL
Jordan has no significant oil resources of its own, and relies on Iraqi oil for nearly all of its needs (currently around 100,000 barrels per day -- bbl/d). Jordan's oil imports from Iraq are permitted by the United Nations under a special dispensation from the general U.N. embargo of Iraq.

In November 2000, Jordan's government concluded a new agreement with Iraq on oil supplies. Under the agreement, Jordan will receive half of its oil free of charge, and will pay a maximum of $20 per barrel for the other half, as long as the market price remains above that level.  If market prices for Iraqi crude fall below $23 per barrel, Jordan will receive a $3 discount below those prices.

Jordan has one refinery, at Zarqa, with a capacity of 90,400 bbl/d. An expansion of the facility to a capacity of 150,000 bbl/d is under consideration, but has not yet been implemented.  Jordan and Iraq had agreed in 1998 to build a pipeline for the transport of Iraqi oil to Jordan's al-Zarqa refinery, and renewed this committment in their most recent oil supply agreement.  This would eliminate the necessity of transporting oil over 600 miles of highway from Iraq with a fleet of 1,500 tanker trucks.  The $325-million project has been postponed repeatedly, though, because Jordan has not been able to assemble enough financing to begin construction. The Jordanian government continues to pursue the project.

Jordan does posess a significant quantity of oil shale resources, possibly as much as 40 billion tons. Canada's Suncor has conducted limited exploration digging in the Lajjun area, southwest of Amman, and currently is negotiating with the Jordanian government on the possible development of an oil shale extraction facility.  If the project is implemented, it could be in production by 2006 at a rate of 17,000 bbl/d, according to Suncor.

Jordan's state Natural Resources Authority (NRA) has been promoting oil exploration within the country, which has been relatively unexplored until now. In October 1995, the NRA signed agreements with Malaysia's Petronas and Houston-based Trans-Global Petroleum for possible exploration of northern and central Jordan. In October 2000, Star Petroleum of the United Kingdom and Black Rock Petroleum of Australia signed an agreement with Jordan for an initial assessment of an area of northern Jordan.  A similar agreement was signed with Dauntless Energy of Canada for an area near Al-Jafar.  If initial surveys are promising, production sharing agreements (PSAs) are to be awarded.  To help attract foreign investment, the Jordanian government has plans to privatize its oil sector. In October 1995, the country set up the state-owned National Petroleum Co. (NPC) to handle upstream oil and gas exploration and development. In mid-1999, NPC divested its oil-drilling operation, which now operates as Petra Drilling Company. NPC is still active in the natural gas sector.

Oil Transportation
A comprehensive settlement of the Arab-Israeli conflict could affect Middle East oil flows significantly. Jordan's geographic location between the Arabian peninsula and the Mediterranean coastal states of Israel and Lebanon offers the potential for alternative oil export routes for Persian Gulf oil to the West. At present, these oil exports must travel either by ship (through the Strait of Hormuz), by pipeline from Iraq to Turkey (capacity 0.8-1.6 million bbl/d), or via the Sumed (Suez-Mediterranean) Pipeline (capacity 2.4 million bbl/d).

Utilization of the Trans-Arabian Pipeline (Tapline) could offer another potentially economic alternative. The Tapline was originally constructed in the 1940s with a capacity of 500,000 bbl/d, and intended as the main means of exporting Saudi oil to the West (via Jordan to the port of Haifa, then part of Palestine, now a major Israeli port city). Following the establishment of the state of Israel, the Tapline's terminal was diverted from Haifa to Sidon, Lebanon (through Syria and Lebanon).

Partly as a result of turmoil in Lebanon, and partly for economic reasons, oil exports via the Tapline were halted in 1975. In 1983, the Tapline's Lebanese section was closed altogether.  Afterwards, the Tapline was used exclusively to supply oil to Jordan, from 1983 until Saudi Arabia terminated this arrangement in 1990 after the invasion of Kuwait.

NATURAL GAS
Jordan has modest reserves of natural gas, 230 billion cubic feet (Bcf), and has developed one gas field, at Risha in the eastern desert near Iraq.  The current output of around 30 million cubic feet per day (Mmcf/d) from the Risha field is used to fuel one nearby power plant, which generates about 10% of Jordan's electricity.

For several years, Jordan has been exploring the option of importing natural gas from Egypt.  In 1999, a decision was made to delay imports until a more thorough evaluation of reserves at the Risha field was completed.  When this review showed that quantities available would not support a substantial production increase, Jordan decided to reopen talks on imports from Egypt.  In May 2001, a 30-year agreement was concluded with Egypt for gas sales to begin at 42 Bcf in 2003 and rise to 70 Bcf by 2008.  A pipeline is to be built from Egypt's existing terminus at El-Arish on the Mediterranean coast near Gaza through Sinai to Jordan, bypassing Israeli territory with a short underwater section near Aqaba.  Financing for the $300 million project is still pending.

Arab governments also have been discussing a potential gas pipeline linking Egypt to Turkey via Jordan and Syria, with a spur to Lebanon.  The Egypt-Jordan pipeline could serve as an initial piece of the larger pipeline scheme, but this seems doubtful given the number of other potential gas suppliers to Turkey, and the history of poor relations between Turkey and Syria.

ELECTRICITY
Almost all electricity production in Jordan currently is carried out by the National Electric Power Company (NEPCO), a state-owned utility, and its subsidiaries. The Zarqa power plant, with a capacity of 400 megawatts (MW), and the Aqaba power plant, with a capacity of 650 MW, are the country's two main power generation facilities. Electricity demand is growing rapidly, around 5% per year since 1995, and the Jordanian government has been seeking ways to attract foreign capital to fund additional capacity.

In May 2000, Jordan awarded its first contract for an independent power producer (IPP) to Tractebel of Belgium. The plant will have a capacity of 450 MW, and will be located near Amman. It will be able to run on either oil or natural gas, and eventually is to be fuelled with gas from Egypt when it is completed in 2004.  A smaller plant with capacity of 100-150 MW may be built before then to handle the anticipated demand increase for 2003.

The U.S. Agency for International Development (USAID) awarded a contract in February 2000 for a study of power sector reform in Jordan. Jordan's basic plan for the future of its electric utility system involves having NEPCO maintain ownership of transmission assets, but relying on private power generation and privatizing existing generation assets.  NEPCO's distribution subsidiary, the Electricity Distribution Company (EDCO), also is be be privatized.  Two other private distribution firms already exist - the Jordan Electric Power Company (JEPCO) in the Amman area and the Irbid District Electricity Company (IDECO) covering the area around Irbid.

An area of potential regional cooperation involves integration of individual national power transmission grids into a regional power network. Such a network would, among other benefits, allow power companies to take advantage of differences in peak demand periods, reduce the need for (and the costs associated with) installation and maintenance of reserve power generating capacity, and provide outlets for surplus generating capacity (mainly from Israel to Jordan).

The first step in this enterprise, the linking of the Egyptian and Jordanian power grids via an underwater cable between Aqaba and Taba (across the Gulf of Aqaba in Sinai), was completed in October 1998 and formally inaugurated in April 1999. Syria and Jordan also have linked their electric grids.  Israel, for the time being, has been excluded from the grid linking projects, but has continued discussions with Jordan on the subject and may join the network once political hurdles related to the Arab-Israeli peace process have been overcome.

In May 2000, Jordan and Syria secured $115 million in World Bank funding for a joint project to build a dam on Yarmouk river. While the primary purpose of the dam is water storage, it also will generate electricity.  Bids for the project were solicited in May 2001.  Jordan also recently solicited bids for a planned 75 MW wind power project, which is to include several small wind farms.

Sources for this report include: CIA World Factbook 2000; Dow Jones News Wire service; Economist Intelligence Unit ViewsWire; Hart's Middle East Oil and Gas; Jordan Times; Middle East Economic Digest; Middle East Economic Survey; Oil and Gas Journal; Petroleum Economist; Petroleum Intelligence Weekly; U.S. Energy Information Administration; WEFA Middle East Economic Outlook.

COUNTRY OVERVIEW
Chief of State: King Abdallah bin Hussein
Prime Minister: Ali Abu Raghab
Independence: May 25, 1946 (from the United Kingdom)
Population (2000E): 5.0 million
Location/Size: Middle East, northwest of Saudi Arabia/89,213 sq. kilometers, slightly smaller than Indiana
Major Cities: Amman (capital), Irbid, Al'Aqabah, Ma'an
Languages: Arabic (official), English
Ethnic Groups: Arab (98%), Circassian (1%), Armenian (1%)
Religions: Sunni Muslim (96%), Christian (4%)
Defense (8/98): Army (90,000); Air Force (13,400); Navy (650); Reserves (35,000); Paramilitary Forces (30,000)

ECONOMIC OVERVIEW
Currency: Jordanian Dinar (JD)
Market Exchange Rate (6/01): US$1 = JD 0.71
Gross Domestic Product (GDP) (2000, market exchange rate): $7.9 billion
Real GDP Growth Rate (2000E): 3.2% (2001E): 3.7%
Per Capita GDP (2000E): $1,182
Consumer Price Inflation (2000E): 2.1% (2001E): 3.1%
Major Trading Partners: Iraq, USA, Germany, India, Italy, United Kingdom, Saudi Arabia
Merchandise Exports (2000E): $1.9 billion
Merchandise Imports (2000E): $3.6 billion
Merchandise Trade Balance (2000E): -$1.6 billion
Major Export Products: Chemicals; phosphates; potash; food; manufactures
Major Import Products: Food; machinery; chemicals; transport equipment; crude oil
Current Account Balance (2000E): $0.6 billion
Unemployment Rate (2001E): 14%
Total External Debt (2001E): $8.3 billion
International Reserves (2001E): $3.9 billion

ENERGY OVERVIEW
Minister of Energy and Mineral Resources: Dr. Hani Malki
Proven Oil Reserves (1/1/01): 890,000 barrels
Oil Production (2000E): 40 bbl/d
Oil Consumption/Net Imports (2000E): 100,000 bbl/d
Main Oil Import Source: Iraq
Crude Oil Refining Capacity (1/1/01): 90,400 bbl/d
Natural Gas Reserves (1/1/01): 230 billion cubic feet (Bcf)
Natural Gas Production/Consumption (1999E): 10 Bcf
Electric Generation Capacity (1/1/99): 1.47 gigawatts (99.6% thermal; 0.4% hydro)
Electricity Generation (1999E): 6.7 billion kilowatthours

ENVIRONMENTAL OVERVIEW
Minister of Water & Irrigation: Kamal Mahadin
Total Energy Consumption (1999E): 0.22 quadrillion Btu* (<0.1% of world total energy consumption)
Energy-Related Carbon Emissions (1999E): 3.9 million metric tons of carbon (<0.1% of world carbon emissions)
Per Capita Energy Consumption (1999E): 33.2 million Btu (vs U.S. value of 355.8 million Btu)
Per Capita Carbon Emissions (1999E): 0.62 metric tons of carbon (vs U.S. value of 5.5 metric tons of carbon)
Energy Intensity (1999E): 35,246 Btu/ $1990 (vs U.S. value of 12,638 Btu/ $1990)**
Carbon Intensity (1999E): 0.65 metric tons of carbon/thousand $1990 (vs U.S. value of 0.19 metric tons/thousand $1990)**
Sectoral Share of Energy Consumption (1998E): Transportation (28.7%), Industrial (37.2%), Residential (25.2%), Commercial (8.9%)
Sectoral Share of Carbon Emissions (1998E): Transportation (29.9%), Industrial (37.9%), Residential (22.9%), Commercial (9.2%)
Fuel Share of Energy Consumption (1999E): Oil (93.2%), Natural Gas (4.8%), Coal (0.0%)
Fuel Share of Carbon Emissions (1999E): Oil (96.3%), Natural Gas (3.7%), Coal (0.0%)
Renewable Energy Consumption (1998E): 7.8 trillion Btu* (240% increase from 1997)
Number of People per Motor Vehicle (1998): 15.2 (vs U.S. value of 1.3)
Status in Climate Change Negotiations: Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified November 12th, 1993). Not a signatory to the Kyoto Protocol.
Major Environmental Issues: Limited natural fresh water resources; deforestation; overgrazing; soil erosion; desertification.
Major International Environmental Agreements: A party to Conventions on Biodiversity, Climate Change, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection and Wetlands.

* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood and waste electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and includes hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas and liquids, industrial and municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data.
**GDP based on EIA International Energy Annual 2000

ENERGY INDUSTRIES
Organization: ­ Natural Resources Authority (NRA) - state body responsible for overall direction of Jordan's energy resources; National Petroleum Company; Petra Drilling Company; Jordan Petroleum Refinery Co. - operates Jordan's single refinery at Zarqa, near Amman; Jordan Electricity Authority - state body responsible for the country's electric power supply
Major Port: Aqaba
Major Oil and Gas Fields: Risha (gas)
Major Pipelines: Tapline - closed (Ras Tanura - Haifa)
Major Refineries (crude capacity): Zarqa (90,400 bbl/d)
 

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Links to other U.S. government sites:
CIA World Factbook - Jordan
U.S. Department of Energy - Office of Fossil Energy - Jordan
U.S. State Department Consular Information Sheet - Jordan
U.S. State Department Country Commercial Guide - Jordan
U.S. Embassy in Jordan
Library of Congress Country Study on Jordan (December 1989)
Department of Commerce - International Trade Administration - Jordan

The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.
Jordan's Embassy in the U.S.
Jordan's National Information Systems for information on government functions, organizations and official agencies
National Electric Power Company (NEPCO)
Jordan's Investment Promotion Corporation
Jordan Export Development & Commercial Centres Corporation
The Center for Middle Eastern Studies - Jordan
Information on Jordan from Arab.net
MENA Petroleum Bulletin
Planet Arabia.com
AME Info Middle East Business Information

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File last modified: June 25, 2001

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