Jordan, Shell sign oil shale agreement

The Kingdom of Jordan has signed a concessionary agreement with Jordan Oil Shale Co. BV, a subsidiary of Royal Dutch Shell PLC, to explore for oil in the country's shale deposits, according to a senior government official.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, May 18 -- The Kingdom of Jordan has signed a concessionary agreement with Jordan Oil Shale Co. BV, a subsidiary of Royal Dutch Shell PLC, to explore for oil in the country's shale deposits, according to a senior government official.

Oil Minister Khaldoun Qteishat, who said the agreement will be sent to parliament for final approval next month, announced that the Shell subsidiary will invest up to $540 million in the project's preliminary exploratory and assessment phase.

Qteishat acknowledged that the "long-term concessionary agreement will take many years to prove and study" whether Jordan's reserves will produce the oil which his country needs.

The concession agreement will allow JOSCo to assess oil shale resources in an area spanning 22,500 sq km located in the country's central, southern and north-western regions.

Shell Vice-Chairman Malcolm Brinded said Shell will examine the most promising of Jordan's 21 oil shale locations and then "hone in on the area that is most promising" of all for its pilot program.

The Jordanian government and Shell concluded an initial agreement on the contract in December, which sees production of oil from the shale within 12-20 years of the conclusion of the agreement,

The agreement between Jordan and Shell is the second in recent months. In April, the Jordanian cabinet approved memoranda of understanding between Inter Rao of Russia and Aqaba Petroleum for oil shale exploration and mining.

As reported by the Jordan Times, the areas that the two companies will explore are near Al Attarat in the southern part of the country.

Meanwhile, other companies seeking oil shale agreements are Estonia's Eesti Energei, Petroleo Brazileiro SA, Total SA, Jordan Energy and Mining, and a Jordanian-Saudi joint venture called the International Corp for Oil Shale Investment.

According to Jordanian figures, 40 billion tonnes of oil shale exist in the country's 21 locations near the Yarmuk River, Buwayda, Bayt Ras, Ruwayshad, Karak, Madaba and Ma'an districts.

Contact Eric Watkins at hippalus@yahoo.com.

More in Drilling & Production