Jordan signs $2bn oil investment agreement with Saudi company

Jordanian government and the Saudi Arabian Corporation for Oil Shale (SACOS), signed on Wednesday a $2 billion agreement under which the government grant the Saudi company the right to extract and develop the Oil Shale resources in the Attarat Um-AL-Ghudran region covering an area of 11 square kilometers.The Saudi company will use the Russian Oil Shale Technology (UTT3000) which has proved its success internationally in developing the Oil Shale since 1950 in Estonia, which is currently producing around 10 thousand barrels a day of shale oil.The project will be developed through two main phases, the first of which is called the Pre-Development phase, which expand over four years. The company will conduct detailed technical, engineering, environmental and feasibility studies according to the concession agreement requirements , during the Pre-Development phase the company shall submit bank guarantees which mounts up to 30 million US dollars to guarantee theaccomplishment of the work program as approved by the government.The second phase is the development and production phase which extends to 40 years starting with a production capacity around 2650 barrels per day reaching up to 30 thousand barrels per day within (8) years, in addition to producing electrical power of 600 MWelect to be transmitted into the national electrical grid, the cost of the project including the shale oil upgrading facilities is estimated to be 4 billion US dollar.During the production phase the company pays a petroleum tax which reaches upto 65% plus a Royalty on production which reaches upto 5% of the production. The company is committed to an annual payment of U$ 100,000 to the Natural Resources Authority for capacity building; in addition to an annual payment of U$ 75,000 for sustainable development projects for local communities. The company is committed also to pay U$ 250,000 as a bonus to the government of Jordan after four years, in addition to 10 million U$ dollars after commercial production.