Jordan is planning to produce up to 100,000 barrels a day by 2020 from the country's vast oil shale-rock formation and other oil exploration blocks from almost nothing now, senior Jordanian energy and company officials said.
Jordan
is
planning to produce up to 100,000 barrels a day by 2020 from the country's vast
oil shale-rock formation and other oil exploration blocks from almost nothing
now, senior Jordanian energy and company officials said.
"We are determined to achieve this goal," director-general of the
state Natural Resources Authority, or NRA, Maher Hijazin said late Tuesday at
the signing ceremony of an oil-shale concession agreement with
Estonia
's
Eesti Energia, better known as Enefit.
Under the deal, Enefit is expected to invest $5 billion over 10 years and to
reach a production target of 40,000 barrels, or about 40% of Jordan's current
oil needs, from a 40-square-kilometer area that is part of Attarat Um
El-Ghudran region in southern Jordan, said Harri Mikk, member of the management
board of Enefit.
Jordan
's
total output would be a drop in the bucket even if it hits its 10-year goal. Global
demand was 84.77 million barrels a day last year, according to the
International Energy Agency.
But the development would help
Jordan
meet
domestic energy requirements as it looks to expand an economy that has been hit
hard by costly bills--around $2.8 billion in 2008, according to government
figures--for petroleum imports.
The kingdom now imports 96% of its energy needs, the country energy minister
Khaled al-Irani said.
Jordan
is
believed to be the holder of the world's fourth largest oil-shale resources,
with Enefit and the government estimating that about 45 billion tons of oil
shale could contain up to 28 billion barrels of oil.
Development of the fields is feasible because as long as oil prices remain
strong. On the New York Mercantile Exchange, light, sweet crude futures for delivery
in June traded above $75 a barrel early Wednesday.
The Attarat Um El-Ghudran--"Mother of Springs" in Arabic--region as a
whole is believed to contain the largest oil-shale deposits in the kingdom,
with an estimated 25 billion tons.
"Enefit's concession area is believed to contain 2.6 billion tons of oil
shale that could be translated to 1.5 billion barrels of oil," Mikk told
Dow Jones Newswires.
Before it can build the plant to process oil-shale rock, Enefit needs to carry
out further survey and additional mine studies and testing, which will take as
long as four years. The company is expected to invest $60 million in that time,
Mikk said.
The construction of the project will take three years, he added. Total project
development would continue for 40 years, he said.
Enefit will hold 76% stake in the project, while a local Jordanian group called
Near East
would own the remaining 24%, Mikk said.
Under a regime approved by the Jordanian cabinet, a contractor carries the cost
of exploration but the government will receive a variable share of eventual
production. At low levels of output, the government shares 40%, but once
production rises, for example to 200,000 barrels a day, the government's share
reaches 70%, officials have said.
Hijazin said that the Jordanian government is expected to sign two similar
concession agreements by the end of this year. He didn't elaborate.
Jordan
has
previously signed eight MOUs to carry out technical and feasibility studies on
the kingdom's oil shale. So far two had been materialized to deals.
The kingdom signed last year a concession agreement with Royal Dutch Shell PLC
(RDSB) to explore oil in the country's oil-shale deposits. Shell is expected to
invest billions of dollars in the project over 20 years.
Shell is planning to drill 30 to 83 wells by the end of this year in its
concession area of 22,000 square kilometers, officials from the NRA told local
press Monday. Shell is planning to drill the first well this month, they said.
Jordan
also
signed a deal last year with BP PLC (BP) that could be worth up to $8 billion
to explore and boost output from the kingdom's Risha gas field, near the border
with
Iraq
.
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