VZCZCXYZ0006
PP RUEHWEB

DE RUEHAM #4278/01 2941511
ZNR UUUUU ZZH
P 211511Z OCT 07
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC PRIORITY 0663
INFO RUEHGB/AMEMBASSY BAGHDAD 5503
RUEHKU/AMEMBASSY KUWAIT 0810
RUEHRH/AMEMBASSY RIYADH 1842
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS AMMAN 004278 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB, NEA/ELA, AND NEA/I 
 
E.O. 12958: N/A 
TAGS: EPET ETRD JO IZ
SUBJECT: Iraqi Jordanian Transport Company Claims Lack of Security 
in Iraq is Hindering Delivery of Oil to Jordan 
 
REFS: A) Amman 4217 
      B) Baghdad 3312 
      C) Amman 3626 
      D) Amman 3557 
      E) Amman 1479 
 
Sensitive but unclassified; protect accordingly.  Not for internet 
distribution or distribution outside the USG. 
 
¶1.  (SBU) Summary:  Director General of the Iraqi Jordanian Land 
Transportation Company (IJLTC) Ghassan Farkouh confirmed that as of 
October 18, 40 of 166 trucks of Iraqi oil had reached Jordan's sole 
refinery in Zarka, and another 23 were about to cross the border 
(reftels).  The whereabouts of the remaining 103 loaded tankers is 
still not clear, owing to security issues in Anbar Province and the 
subsequent lack of communication with the drivers who are 
subcontracted by a local Iraqi transport company.  Unexplained and 
inconsistent differences in the specific gravities of oil in each 
truck arriving in Jordan from Kirkuk have also caused IJLTC to be 
concerned about possible theft.  End Summary. 
 
The Company 
----------- 
 
¶2. (SBU) IJLTC Director General Ghassan Farkouh told EconOffs during 
an October 18 meeting that one of IJLTC's few current operations in 
Iraq is the transport of oil from Kirkuk to the Jordan Petroleum 
Refinery Company (JPRC) in Zarka, per a 2006 agreement between the 
GOJ and GOI (reftels).  IJLTC, established in 1982 as a privately 
managed company based in Amman and jointly owned by the Government 
of Jordan (GOJ) and the Government of Iraq (GOI), has seen its 
operations in Iraq steadily decline, in part due to decreasing 
Jordanian exports to Iraq and increasing costs and security 
concerns.  The company's fleet of 1,000 trucks has been reduced to 
150 trucks, of which many are relatively antiquated 1994 models. 
IJLTC employs about 70 drivers, who earn a basic salary of 150 JD 
(USD 211) per month with incentives, such as bonuses for each trip, 
which bring the salaries for some drivers up to 700 - 800 JD (USD 
988 - 1130) per month. 
 
Delivery Process for Iraqi Oil 
------------------------------ 
 
¶3.  (SBU) Farkouh explained that despite GOJ and GOI ownership of 
IJLTC, the company alone bears the responsibility for ensuring that 
oil reaches the Iraq-Jordan border.  The Iraqi State Oil Marketing 
Organization (SOMO) is only responsible for loading the oil onto 
trucks in Kirkuk and expects to be paid at that point, Farkouh said. 
 IJLTC then becomes responsible for the complicated process of 
transporting the oil, and only receives payment from the Jordanian 
government when the oil reaches JPRC.  He elaborated that since 
IJLTC cannot use its own old vehicles due to a lack of spare parts 
in Iraq, it must hire a local subcontractor, the "Iraqi Oil 
Transportation Company," which is owned by the GOI, SOMO, and the 
private sector.  The subcontracted trucking company moves the oil 
from Kirkuk through the suburbs of Anbar Province to the 
Trebil/Karamah border crossing.  Farkouh added that it normally 
takes 1-2 days to get the trucks through the Iraqi bureaucracy at 
the border, and then one hour to transfer the oil from the Iraqi 
truck to the Jordanian truck.  The GOJ only pays for the oil 
actually received, which, due to graft, theft, or differences in 
calibration, can differ from the amount loaded onto the tankers. 
 
Where are the 166 Trucks of Iraqi Oil? 
-------------------------------------- 
 
¶5.  (SBU) Farkouh confirmed that following a series of security and 
technical problems, loading of 166 trucks had begun at Kirkuk on 
September 12.  He noted that 40 tankers had arrived at JPRC, and 23 
were expected to cross the border on October 18 (ref A).  When asked 
about the location of the other vehicles, Farkouh said that 
recurrent security problems in Anbar Province had hindered 
operations, reporting an alleged 27 trucks in Kirkuk and and another 
38 parked by the drivers at their homes in Fallujah.  He could not 
provide locations for the remaining trucks.  The Iraqi Ministry of 
Transport informed IJLTC that some of the trucks went to Kurdistan, 
but Farkouh said IJLTC's initial investigations indicated that this 
was not accurate. 
 
Security Problems in Anbar Hindering Operations 
--------------------------------------------- -- 
 
¶6.  (SBU) Farkouh noted that the current situation highlighted 
 
IJLTC's lack of control of the subcontractors' vehicles and drivers 
in Iraq.  He explained that after the assassination of Sahwa 
al-Anbar chief Sheikh Ahmed Abu Risha, operations became unsafe for 
his company because control over the tribes was lost and militias 
resurfaced.  Following the subsequent fighting, the company lost 
mobile communication with many of its drivers along the 
775-kilometer stretch from Kirkuk to the company checkpoint located 
five kilometers from the border.  Contact previously maintained with 
local police offices had also been lost, and some of the company's 
local representatives had fled the area.  Farkouh said IJLTC had 
suspended any further loading of tankers at Kirkuk until the 
security situation could be evaluated and improved. 
 
¶7.  (SBU) Farkouh said that in the past, the company never actually 
paid for security.  Rather it employed local tribesmen as a means of 
generating income for local communities and ensuring that the tribes 
would not attack their own.  Now that the situation had become 
untenable, Farkouh said IJLTC was examining whether it should begin 
to pay specifically for security and protection services, but he 
wanted to be extremely cautious and do things legally to make sure 
that any payment went to the right people and not to terrorist 
groups.  Farkouh had heard reports that the situation in Anbar might 
improve in the near future, and in that case, he believed 
telecommunications would be reinstated, alleviating some of the 
company's difficulties. 
 
Possible Theft of Oil? 
---------------------- 
 
¶8.  (SBU) Beyond lack of security, Farkouh lamented his company's 
inability to prevent the possible theft of oil in Iraq.  He said 
that IJLTC had provided meters to the Kirkuk refinery, but IJLTC 
continued to receive inaccurate or inconsistent documentation of 
specific gravities of oil in each truck.  As an example, he 
recounted that IJLTC was expecting 1,100 metric tons of oil, but 
when received, 60 tons were effectively missing.  Farkouh said that 
IJLTC had not yet received a clear explanation for the discrepancies 
from the Iraqi refinery whose employees had even threatened IJLTC 
representatives for asking such questions.  Nevertheless, Farkouh 
speculated that the losses may be due to oil being stolen and sand 
or water being put in its place, thus affecting the specific 
gravity.  He commented that such problems were not present on the 
Jordanian side, where the weights taken at the border and 
subsequently at JPRC usually matched, save for the expected standard 
deviation for fuel use. 
 
¶9.  (SBU) Comment:  Farkouh appeared to be under pressure and 
concerned about his company's limited control over operations in 
Iraq, for which IJLTC is still held responsible.  The security of 
his employees and difficulty filling vacant positions in Iraq also 
seemed to weigh heavily. 
 
Visit Amman's Classified Website at: 
http://www.state.gov.sgov.gov/p/nea/amman/ 
 
Hale