Lower House committee terminates oil shale concession agreement

AMMAN — The Lower House's Energy and Mineral Resources Committee on Wednesday green-lighted a bill revoking the law ratifying the oil shale concession agreement signed by the government, represented by the Natural Resources Authority (NRA), and the Jordan Oil Shale Company B.V (JOSCO) for 2022. 

Committee head MP Talal Ensour said during the meeting that Jordan's economic conditions necessitate examining all details of agreements between the government and companies investing in the Kingdom's energy sector, the Jordan News Agency, Petra, reported. 

The meeting was also attended by Minister of Energy and Mineral Resources Saleh Kharabsheh and Minister of State for Legal Affairs Nancy Namrouqa,

No financial obligations were incurred by the government after revoking the oil shale concession agreement, Kharabsheh said, adding that “JOSCO spent around JD280 million in drilling 250 wells to conclude that the project is unfeasible, as it is a pilot project based on heating oil shale at depths of hundreds of metres to turn it into oil”.

The company found that the Jordanian oil shale has a high percentage of sulfur and carbon content, which makes the project unfeasible for investment, he added.

Due to the expiry of the notice period, the concession agreement is deemed terminated by law, given that JOSCO ended the oil shale concession agreement with the government, he said.

As per the agreement, the company is entitled to terminate the concession agreement after the end of the evaluation period and ahead of the first pilot phase, according to a 90-day notice sent by the company to the government, he noted.

The pilot project did not impose financial obligations on the government, the minister said, noting that Jordan has benefited from the equipment donated by the company.

Since the beginning of 2022, the ministry signed seven memoranda of understanding meant to explore the extraction of several minerals, he said, noting that further agreements are in the pipeline.