AMMAN — The Ministry of Energy and Mineral Resources on Wednesday signed with Karak International Oil (KIO) and the Saudi Arabian Corporation for Oil Shale (SACOS), two 40-year concession agreements to exploit shale oil with surface distillation for oil production in the Lajoun and Umm Ghadran regions.
A Royal decree was issued approving a law amending a previous bill for the ratification of the concession agreement for the surface distillation of shale oil penned between the government and the (KIO), and a law amending another act for the ratification of the concession agreement for the surface distillation of shale oil between the government and the (SACOS), expected to be published on the Official Gazette on Thursday.
According to the two agreements, it is expected the production of the shale oil with surface distillation in the Lajoun area will reach 25 thousand barrels per day and 30 thousand barrels per day from the project of exploitation of shale ore in Umm al-Ghadran, a 11-square kilometres region, with 2500 barrels of oil production in initial phase.
The two agreements were signed by Minister of Energy and Mineral Resources, Dr Saleh Kharabsheh and Vice Chairman of the Board of Directors of Al-Karak International Oil, Munther Akroush, and Chairman of the Board of Directors of Saudi Arabian Corporation for Oil Shale, Hashem Thalab.
During the previous period, the KIO has completed several pre-development studies. However, some regional and economic conditions triggered a delay in completion of the work as set in the period of the concession agreement period.
The SACOS also applied 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 at the project site as an initial stage of production.
The two companies are currently seeking to attract financiers to contribute to the project, in which the cost of each enterprise surpasses more than two billion US dollars.
The amendments came in line with the government's strategy to boost investment in shale oil amid tumultuous regional conditions and the a slump of crude oil price over the past few years, a situation that drove contracting parties to sit at the negotiating table to reach understandings to push forward projects to shun deadlock, and reflected the government's keenness to ensure diversity in local energy sources.
The government is working to support companies involved in the shale oil industry and is trying to counter obstacles facing investment projects.
The above amendments came as part of gov't bids to push ahead with carrying out the accords penned in this key field.
(Petra)
