Norwegian giant Norsk Hydro has pulled out of a joint venture deal with Jordanian firms in order to pursue oil and gas projects elsewhere, Prime Minister Ali Abul Ragheb said on Sunday.
Abul Ragheb, who was speaking to Lower House of Parliament members during their regular session, said Norsk Hydro's decision was not made due to “political” reasons in the region.
The premier said the initial agreement between the Norwegian firm and the Jordan Phosphate Mines and the Arab Potash Companies had an exit clause granting the board of directors of each firm the right to get out of the agreement.
“The Norwegian firm has decided to switch its investment to other projects because it feels that such a decision will earn it more profits,” Abul Ragheb said.
The premier indicated that the increase in oil prices worldwide had instigated their decision.
According to the initial agreement, the Norwegian firm was scheduled to pay 60 percent of the project's capital while the two Jordanian firms would pay the rest.
The two sides also established a firm to produce fertiliser and market it worldwide.
Abul Ragheb said that the government is looking for other investors to replace the Norwegian firm and launch investments in the potash and phosphate sectors.
Earlier this month, Norsk Hydro announced that it had pulled out from the $700 million project because a “higher priority has been given to other investment opportunities.”
Jordan's mining industry is currently suffering from a decline in profits, especially in the potash and cement industries. The phosphate company has incurred JD58 million in losses in the first half of this year.
Senior World Bank officials have recently suggested the privatisation of the phosphate company, which is among the few sectors that have not been allowed to be privatized.
( Jordan Times )
By Tareq Ayyoub
© 2000 Mena Report (www.menareport.com)
