Exclusive: Jordan eyes oil shale production by 2022, energy minister says

The kingdom aims to produce 25,000 barrels a day easing the financial burden from importing most of its energy needs

Aqaba has instigated a variety of initiatives regarding earthquake risk reduction. Alamy Stock Photo

Jordan expects to reach financial closure soon on its oil shale programme that could transform the energy importer into an oil producer for the first time, according to its energy and mineral resources minister.

"With regards to oil shale, we have four companies today working in Jordan. One of them today reached financial closure and we hope that very soon they will be able to secure the finance and to start on the ground," Hala Zawati, told The National on the sidelines of the Berlin Energy Transition Dialogue.

“And if they do so, the plan is to produce over 25,000 barrels per day and this is huge for Jordan because we are not an oil producing country and this would be the first time we will be producing oil,” she added.

Jordan, which imports more than 95 per cent of its energy, has the world's eighth largest reserves of oil shale, according to the World Energy Council. Oil shale, not to be confused with shale oil, is formed of organic fine-grained sedimentary rock, from which oil can be extracted through heating.

The kingdom has been looking to shake off the burden of energy imports which continues to widen its fiscal deficit and led to an increase in public debt. After reaching financing, the development of the scheme could happen in "three years,” said Ms Zawati.

"I believe they need three years to develop the project and the financial closure depends on the financiers and we do hope that they will be able to close this year,” she added.

Jordan's oil shale programme has been in the works since 2008, when oil prices reached a record $147 per barrel in July of that year and prompted the government to accelerate the development of its reserves with the help of Estonia's company Enefit - the world's largest oil shale producer.

Last year the energy ministry awarded Amman-based Karak International Oil as well as the Saudi Arabian Corporation for Oil Shale 40-year rights to exploit two oil shale reserves.

Amman’s energy import bill is around 9 per cent of its gross domestic product, said Ms Zawati, with efforts underway to integrate more renewables to grid to lower imports.

The country is currently 90 per cent dependent on gas, with half of its consumption met through imports via pipeline from Egypt

The flow of gas from Egypt is intermittent, said Ms Zawati.

“Sometimes we get the [committed volumes] , sometimes it’s zero but on average it will be half of our consumption in 2019,” she added. Jordan consumes an estimated 350 million cubic feet per day of gas.

Amman is also pressing onward with plans for a million bpd capacity pipeline from Iraq as well as plans for a new refinery in the Red Sea port of Aqaba.

Jordan plans to turn some of the crude into white products for exports and is looking to bring in investors willing to back the scheme.

“[The new refinery] is not part of the pipeline project, but we think that it will be tempting for investors to come in,” said Ms Zawati.

An agreement with the Iraqi side on the pipeline is like to happen “soon” with the construction expected to take three years, she added.

The kingdom is set to add more wind and solar schemes to generate electricity which will derive 16 per cent of its power from renewable sources in 2019. The country last year generated 10 per cent of its energy needs from renewables.

By 2020, around 20 per cent of the kingdom's power will come from renewables, with 80 per cent from gas and 15 percent from an oil shale power plant, added the minister.