Jordan joins the shale revolution

For a country that has no natural resources, imports all of its energy, and is battling Israeli efforts to undermine its plans of attaining nuclear energy, the answer to Jordan’s energy needs may rest in a rock.

The kingdom has the world’s fourth-largest reserves of oil shale, an organic-rich, fine-grained sedimentary rock from which liquid hydrocarbons (shale oil) can be produced. Shale oil is a substitute for conventional crude oil, and the oil can also be burned directly for power production similar to coal.

“For a country like Jordan, which has no resources of conventional oil, this is a substantial energy resource that could potentially cater to a significant percentage of Jordan’s energy requirements for many years to come,” says Andres Anijalg, project director of Estonia’s Enefit, which is operating in the kingdom. Jordan’s import bill for fuel accounts for about 20 percent of gross domestic product (GDP).

The biggest oil shale reserves are located in the US, China, Russia, Brazil and Jordan. The countries that already use oil shale as an energy source include Estonia, Brazil and China. Estonia has used its oil shale resources for oil production and power production for almost 100 years. In the US, significant research and development with regards to oil shale is ongoing, while other countries with large oil shale deposits are also currently studying the feasibility of utilising their oil shale resources. Oil shale was utilised in northern Jordan prior to and during World War I. However, intensive and active exploration and studies of Jordan’s oil shale resources and potential uses only started in the 1970s and 1980s. Oil shale represents a significant resource in Jordan — approximately 60 percent of Jordanian territory contains oil shale deposits, which amount to an estimated 40 -70 billion tonnes of oil shale available in the kingdom, says Anijalg.

“Suffice to say that if Jordan was to fully leverage its oil shale resources, it would not only be able to satisfy its domestic energy needs but would also be in a position to become a net exporter of energy to neighbouring countries," says Anijalg.

The most important deposits are located in the west-central region of Jordan within 20 to 75 kilometres (12 to 47 miles) east of the Dead Sea. In addition to the west-central deposits, the Yarmouk deposit located near Jordan’s northern border is another important location. A third oil shale region lays in the Ma’an district in the southern part of the country.

For a country that imports 96 percent of its fuel needs (the daily equivalent of 100,000 barrels of a oil a day), and until recently was dependent on Egypt for its gas supply, which has caused its public debt to soar, the prospects from the oil shale are very promising.

“It’s not wishful thinking — we could far exceed 100,000 barrels a day” says Yusuf Mansur, managing partner of EnConsult and former CEO of the Jordan Agency for Enterprise and Investment Development. “It will have a fantastic impact.”

“The impact would be a great relief to the government budget, it would reduce the trade deficit and the need to import fuel, as well as reduce pressure on the dinar,” adds Mansur. “The investment will create great revenues for the government, which would be part-owner and receive royalties which wasn’t available before. It would also reduce dependence on aid, and would generate FDI in the hydrocarbon industry and its derivatives.”

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