BAGHDAD (AFP) - Iraq has struck a deal to supply neighbouring Jordan with cheap oil by laying a new pipeline across the desert between them, the countries' prime ministers have announced.
"Iraq and Jordan have signed a memorandum of understanding that involves cooperation in the oil sector, including laying a pipeline and supplying the kingdom with oil," said Iraqi Prime Minister Nuri al-Maliki.
Maliki appeared at a joint press conference with his Jordanian counterpart Maruf Bakhit who was making a visit to the war-torn Iraqi capital.
"Under the agreement, we are thinking of broader cooperation in the field of oil. One of these horizons is laying or re-laying a pipeline that carries crude to the Jordanian refinery and to other regions," Maliki said.
"There is a written memorandum of understanding whereby a period is defined when Jordan is in need to the Iraqi oil. This is in addition to the preferential prices we agreed on," he said, without giving details.
Pre-war Iraq was one of the world's mightiest oil producers and the Maliki government is trying to revive the sector in order to maximise revenue from its reserves, still considered the world's second or third biggest.
Insurgent attacks, sanctions and corruption have cut output, and Iraq is struggling to refine enough crude into fuel for its own population, hence the need to secure import routes for patrol and other oil-derived products.
"The attacks on the pipelines are causing fuel crises. It is also causing crises in power supply as a result of sabotage," Maliki said, as outside his fortified compound thousands of motorists queued for scarce supplies.