Global law firm K&L Gates LLP successfully advised Karak International Oil, a subsidiary of U.K. company Jordan Energy & Mining Limited (JEML), on the signing of a US$1.8 billion oil shale retort concession agreement with the Jordanian Government to develop part of Jordan’s extensive oil shale reserves.
Jordan is estimated to have 40 billion tonnes of oil shale deposits, making it the fourth largest oil shale deposit in the world, but currently imports 96% of its energy needs. JEML’s new extraction and processing plant will significantly reduce Jordan’s reliance on imported oil and gas and help to put the country on track for self sufficiency in hydro carbons.
Scheduled to begin in 2014, production is expected to reach an average of 15,000 barrels per day of oil equivalent in 2016 and to increase gradually to as much as 60,000 barrels a day over a phased expansion period. The project, which involves developing a 35 square kilometre oil shale deposit in the Al Lajjun desert about 118 kilometres south of Amman, will also recruit some 700 people in direct jobs and an estimated 2,500 indirect jobs in construction and support services.
This is the third major concession agreement signed by the Jordanian Government during the past two years, but the first to utilize the Alberta Tacuik Processing surface retorting technology owned by the ThyssenKrupp Group.
Chris Morgan, CEO of JEML, said: “Following almost five years of field work in Al Lajjun and extensive feasibility studies, we are very pleased to have signed this concession agreement and look forward to producing new oil from Jordan’s indigenous resources and to provide economic wealth creation for the benefit of Jordan.”
K&L Gates London corporate partner Jeremy Landau, who has advised JEML from its beginnings, stated: “We were particularly delighted to have acted for Jordan Energy & Mining on this transaction and now look forward to working with the company on the engineering, construction and further financing of the project going forward.”
K&L Gates senior consultant David Race advised on the concession arrangements.
“This is a clear vote of confidence by the private sector in the attractiveness and stability of Jordan for investment and of the ability of innovative British companies to raise funds from the capital markets in London, New York and other major centres,” commented Peter Millett, the U.K. Ambassador to Jordan, on the deal.
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