The Parliamentary Energy and Mineral Resources Committee discussed a draft law to cancel the ratification of the production sharing agreement to explore for oil, and evaluate its discovery, development and production between the Natural Resources Authority in the Kingdom and Ammonite Energy Company “International Corporation” in the Jafr region and central Jordan.

This came during the committee’s meeting today, Thursday, chaired by its chairman, Talal Al-Nsour, and in the presence of the Deputy Chairman of the Board of Commissioners of the Energy and Minerals Regulatory Authority, Dr. Imad Al-Najdawi, the Commissioner in the Geological Council, Wafaa Al-Bakhit, the Advisor to the Secretary-General of the Ministry of Energy, Eng. Smith.

At the outset of the meeting, Ensour asked about the reason for canceling this agreement, and would its cancellation lead to any financial costs for the Jordanian treasury, calling on the government to verify the seriousness of companies wishing to explore and discover oil with the utmost accuracy through its previous experiences in this field.

He explained that the reasons for the decision to revoke the ratification of the agreement came as a result of (Amonite)’s failure to implement its contractual obligations according to the terms of the agreement concluded with it to explore for oil in the Jafr region and central Jordan, which constitutes a material breach of the terms of this agreement.

For their part, the deputies: Firas Al-Qudah, Shadi Freij, Suleiman Abu Yahya, Omar Al-Naber, Ali Al-Tarawneh, Saleh Al-Wakhian, and Faliha Al-Khudair, asked a number of questions related to the agreement, the reasons for its cancellation, and the financial implications in this regard.

The deputies called on the government to provide clear answers about the agreement, through which it confirms that the state treasury will not bear any financial obligations.

The committee decided, after extensive discussion, to postpone the decision to cancel the agreement until the government undertakes not to burden the state treasury with any financial obligations in the event of cancellation.
For its part, the team of the Ministry of Energy presented a summary of the merits of the draft law to cancel the ratification law of the (Ammonite) agreement.

For her part, Al-Nimri said that the cancellation decision came due to the failure of (Amonite) to implement its contractual obligations according to the terms of the production sharing agreement in the Al-Jafr region and central Jordan.
She explained that the company, after the date of entry into force of the agreement in its issuance in the Official Gazette on June 2, 2015, did not implement any of its contractual obligations despite the Ministry’s follow-up to the company on the need to adhere to the provisions of the agreement, as the company justified its inability to comply with this agreement due to the fluctuation of oil prices.

In accordance with the provisions of Article 32 of the production sharing agreement, the government canceled the agreement in accordance with its powers, as the company failed to implement its obligations.