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Jordan Signs Oil Shale Deal with Shell

Written by The Media Line Staff
Published Wednesday, February 25, 2009

The Jordanian government has finalized negotiations with the European oil and energy giant Royal Dutch Shell over an agreement for the extractions of oil from oil shale, following the signing in December of an initial agreement between the company and the Natural Resource Authority, the Jordanian newspaper Jordan Times reported.

Oil shale is a fine graded sedimentary rock, which contains significant amounts of kerosene. The extraction of oil from oil shale is more complicated and expensive than refining oil from crude oil. There are also several environmental issues involved in the process, such as wastewater disposal and air pollution.

In accordance with the agreement, the first commercial quantities of oil will be extracted within 12-20 years from the signing of the agreement. The total investment in the projects is estimated to range between $20-25 billion, with Shell investing $430 million in the initial part of the project, focusing on assessing the project and estimating its revenues.

The net gain for Jordan from the project is expected to be $200 million per year in addition to revenues generated from royalties and taxes on produced oil which will be calculated on the basis of market oil prices, said the paper. 

Meanwhile, the Jordanian government also signed a deal with the Estonian energy company Eesti Energia for the production of electricity from oil shale.

While some 92 percent of Jordan is desert, the country has not been blessed with any of the huge quantities of oil as have its eastern neighbors such as Iraq or Saudi Arabia.

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