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Jordan Parliament Approves Shell Oil Exploration Deal

THE WALL STREET JOURNAL

JULY  16, 2009, 5:19 A.M. ET

AMMAN (Dow Jones)–The Jordanian Parliament has approved a multi-billion dollar concession agreement with Royal Dutch Shell PLC (RDSA) to explore oil from Jordan’s vast oil shale resources, a person at the country’s Natural Resources Authority, or NRA, said Thursday.

“The council of deputies has ratified the agreement during a session held Wednesday,” the person told Dow Jones Newswires. The Jordanian government approved the agreement in May.

Shell is expected to spend around $500 million on exploration, assessment and designs on the project, Jordan’s Energy Minister Khaldoun Qutishat told parliament. Some $150 million will be paid to the Jordanian government before the contracting company begins investing in the project, he said.

Shell is expected to invest billions of dollars in the project over 20 years. The project would cover an area of 22,000 square kilometers and could produce thousands of barrels of oil from oil shale.

The Kingdom holds some 40 billion metric tons of proven oil shale reserves, a figure which could be doubled, according to NRA figures.

Jordan’s Qutishat said after signing an initial agreement with Shell in May he expected the initial phases of the project to take 12 years and 18 years and said the final investment decision for the project could be worth $15 billion.

Jordan had signed six memorandum of understanding with six companies to carry out technical and feasibility studies on its oil shale. The most recent one was signed with Russia’s Inter Rao USE and India’s Oswal Chemical & Fertilizers Ltd. (500063.BY).

Jordan, home to around 6 million people, imports some 100,000 barrels of crude oil a day, which constitutes around 95% of its energy needs.

-By Hassan Hafidh, Dow Jones Newswires; + 962 799 831 831; [email protected]

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