JORDAN OIL SHALE AGREEMENT SIGNED - MARCH 2011
14 March 2011
The deal will bring many benefits to the Hashemite Kingdom of Jordan:
- Energy self-suffiency - With little other indigenous energy resources, oil imports currently account for up to 20% of Jordan's Gross Domestic Product (GDP). By developing its abundant reserves of oil shale, Jordan can transform itself from an importer to an exporter of oil and energy.
- Energy security - At current consumption rates, Jordan's oil shale could meet the Kingdom's energy needs for over 900 years.
- Increased national wealth - Income from tax and royalties will produce an average annual government take of $60m per year and a cummulative sum of $2 bn over 30 years at an initial production rate of 15,000 barrels per day, assuming a price of $75 per barrel of oil. At higher oil prices the returns for the government will increase.
- Inward investment - The first phase of the project will attract $1.6m to $1.8m capital expenditure and annual cash operating costs of between $110 and $120m per year.
- Employment opportunities - KIO's policy of employing local people wherever practical is expected to create 700 direct jobs in the first phase of the project (15,000 barrels of oil per day) and an estimated 2,500 indirect jobs in construction and support services.
- Transfer of skills - KIO will invest in training and development to create a bank of expertise that will benefit local communities even after the project has ended.
The KIO mining project will operate according to accredited international standards of best practice including the Equator Principles, the UN Global Compact and the International Labour Organization Declaration of Fundamental Principles and Rights at Work.
Commenting on the Agreement, His Excellency Dr Maher Hijazin of the Natural Resources Authority said, "We have been very happy with the commitment and quality of work submitted by JEML/KIO over the past 5 years and we look forward to working closely with them to develop this important new venture to the benefit of all parties."
KIO is the Jordanian operating subsidiary of Jordan Energy & Mining Limited, a UK-registered company whose directors have extensive knowledge and experience of the mining and oil and gas sectors.
Commenting on the Agreement, Jordan Energy & Mining managing director Christoper Morgan said, "Following almost five years of field work in Al Lajjun and extensive Feasibility Studies, we are very pleased to now sign this Concession Agreement with the Government of Jordan. The Agreement will allow us to proceed to detailed engineering and to construct and operate the facilities under internationally competitive and stable fiscal and legal terms. We look forward to producing new oil from the country's indigenous resources, as well as providing fresh employment opportunities and economic wealth creation for the benefit of Jordan."