Gov’t signs shale oil concession deals

AMMAN — The Ministry of Energy and Mineral Resources on Wednesday signed two 40-year concession agreements with Karak International Oil (KIO) and the Saudi Arabian Corporation for Oil Shale (SACOS) to exploit oil shale with surface distillation for oil production in the Lajoun and Attarat Umm Ghadran areas.

The two companies are currently seeking to attract financers to contribute to the project, in which the cost of each scheme exceeds $2 billion, the Jordan News Agency, Petra, reported.

A Royal decree had been issued approving a law amending a previous bill for the ratification of the concession agreement for the surface distillation of oil shale signed between the government and KIO.

The decree also approved a law amending another act for the ratification of the concession agreement for the surface distillation of oil shale between the government and SACOS, expected to be published in the Official Gazette on Thursday.

According to the two agreements, the production of oil shale in the Lajoun area is expected to reach 25,000 barrels a day and 30,000 barrels a day at Umm Al Ghadran, an 11sq.km area, where 2,500 barrels of oil are expected to be produced in the initial phase.

The deals were signed by Minister of Energy and Mineral Resources Saleh Kharabsheh and Vice Chairman of the Board of Directors of KIO Munther Akroush and Chairman of the Board of Directors of SACOS Hashem Thalab.

Earlier, KIO completed several pre-development studies, yet some regional and economic conditions caused a delay in the completion of work as set in the period of the concession agreement.

SACOS requested to amend certain items in the concession agreement for reasons related to the company and its work. The company is currently being supported by SAB Oil to develop new oil shale distillation technology, and plans to establish a pilot plant on the project’s site as ahead of actual production.

The amendments came in line with the government’s strategy to boost investment in oil shale amid turbulent regional conditions and the drop of crude oil prices over the past few years.

These circumstances required contracting parties to reach understandings to push forward projects and avoid any deadlock, which reflects the government’s keenness to ensure diversity in local energy resources, the agency said.

The government is working to support companies involved in the oil shale industry and is trying to address challenges facing investment projects, according to Petra.