In spite of lower oil prices and the run-up to a possible global recession, many experts believe still believe lower oil prices are not sustainable on the long run. This bodes well for countries such as Jordan, which are thus encouraged to tap into relatively new sources of energy like oil shale.
In 1947 oil exploration started in Jordan, a country deemed difficult to explore from a geological perspective. “We’ve made two small discoveries in the 80s in the Azraq region, an area which currently produces about 30 barrels per day. We also discovered gas along the Iraqi border which has allowed us to produce about 21 million cubic feet per day,” said Dr Maher Hijazi, director general of the Natural Resources Authority.
In 2004, as oil prices rallied, oil industry players started eyeing Jordan with acute interest. Currently companies such as the SRL from Ireland, Indian Universal Energy Corporation, Global Energy and American Sonoran Energy are investigating Jordanian market potential.
One energy source attracting international players is oil shale. “Jordan is blessed with huge oil shale reserves which cover about two thirds of the country. Oil shale reserves located in the south and the center of the country are usually found close to the surface at some 30 to 40 meters depth, while in the rest of the country, they lie at a depth of 100 meters,” Hijazi said. Reserves found close to the surface are easily accessible while deposits deep in the earth’s mantle are more difficult to mine.
Black gold by the ton
“The amounts of oil shale found close to the surface are very significant, with conservative estimates putting them at more than 40 billion tons,” the director said. He explained that over the past three years Jordan has tried to draw industry interest, while industry players are equally considering oil shale or tar sands as a viable option due to soaring oil prices.
“We have tried to draw companies that possess solid experience in oil shale extraction. One has to keep in mind, however, that there are no commercial projects for oil shale but only small experimental projects, which account for a production of 15,000 barrels per day,” Hijazi said.
Brazil’s Petrobras, which produces about 3,700 barrels per day, boast oil shale extraction experience. Estonian, Russian and Canadian companies have also developed technologies that can be adapted to oil shale extraction. “These companies have all come to Jordan in the past two years,” Hijazi pointed out.
The director added that memoranda of understandings have been signed with several companies and the Jordanian government, with concession negotiations scheduled in the next few years.
Petrobras recently announced it joined forces with Total, signing an MOU to produce crude from Jordanian oil shale, while Estonian ST Energia has completed a feasibility study on production of oil shale in Jordan, estimating the cost for a plant at $8.5 billion and production levels at 36,000 barrels per day.
The concession agreement to be negotiated by the Jordanian government with ST Energia covers Atarat Umm el-Ghudran, an area 120km south of Amman believed to have some 50,000 barrels per day in production potential. Other feasibility studies underway include one by the Jordan Energy Mining limited (JEML), a British company relying on Canadian technology, another by a Saudi company using Russian technology and Oswal Chemicals, an Indian company also using Russian technology. JEML will be submitting its study early next year while Petrobras’ will be finished in three years.
The current MOUs primarily focus on surface retorting — hydrocarbon recovery from oil shale located on the surface. “Deep oil shale exploration is another matter completely, as only one technology is available, developed by Shell in Colorado, that allows to exploit reserves found deep in the earth crust,” Hijazi explained.
“We have been in negotiation with Shell for more than two years now and hopefully will finalize an agreement by early next year. The Shell project has, however, a very long term horizon and is highly risky as it requires billions in capital,” he said.
Hijazi pointed out the possibility for the Estonian company to use technology the company has developed to produce energy from oil shale without refining it. The company is currently doing a feasibility study for building a power plant capable of producing 600 to 900 MGW, which would cover half the needs of Jordan in electricity. The project would be completed in seven years and would cost $1.5-2 billion.
The main problem with oil shale extraction is it is usually site specific, with each reserve showing different geological characteristics. Technology thus needs to be adapted to each site. One main advantage Jordan has, though, is the land where oil shale can be found is public, which facilitates the process of exploration and granting concessions. “The Shell long term project, if successful, would transform Jordan into an oil exporting country. Jordan is today one of the top five countries boasting oil shale reserves,” claimed Hijazi.
