Trowers & Hamlins LLP, the international law firm, has advised the Government of Jordan on the structuring and negotiation of a major oil shale concession agreement with Karak International Oil, an affiliate of Jordan Energy Mining Limited.
JEML is expected to invest some $1.8 billion in the project which is anticipated to generate 15,000 barrels a day of oil by 2016 and could increase to 30,000 barrels a day.
The concession agreement with Karak International Oil follows the oil shale industry framework which Trowers & Hamlins developed over a period of years with the Natural Resources Authority in Jordan. This framework has already seen Trowers & Hamlins advise on two concessions signed to develop this unconventional resource.
In May 2009, Trowers & Hamlins announced its role in advising Jordan on a concession agreement granted to Royal Dutch Shell plc, whilst in May 2010 Trowers & Hamlins announced its role in advising Jordan on an oil shale concession agreement granted to Enefit, an affiliate of Eesti Energia.
Under the terms of the agreement, Karak International Oil will conduct geological and hydrogeological studies of Jordan’s oil shale resources and test the environmental impact of its oil shale processing technology. Within four years, Karak International Oil will decide whether to continue the project and begin the construction of a commercial processing plant. Karak International Oil may use Jordan’s oil shale resources for up to 40 years, with an optional extension of another 10 years.
Trowers & Hamlins provided legal advice to the government of Jordan to develop an effective deal structure which is sustainable throughout the duration of the concession agreement. The advice focused on promoting successful resource development through effective sharing of project revenue and management and mitigation of project risk.
Martin Amison, Head of International at Trowers & Hamlins, who led the legal team on the deal, said: “Trowers & Hamlins has a very strong track record in the energy sector and has been involved with advising on Jordan’s oil shale for some years. This concession agreement is a significant success for Jordan as it represents the third such concession which has been signed and puts Jordan squarely at the forefront of the commercialisation of shale oil resources.”
“We are delighted to have been able to participate in this transaction and build on the concession structures which were used in the previous agreements. We hope that this project will help Jordan satisfy its energy needs in the future.”
Trowers & Hamlins is an international law firm with offices in the United Kingdom and the Middle East (Abu, Dhabi, Bahrain, Cairo, Dubai, Muscat and Riyadh) providing the full range of business law services. In Jordan the firm is associated with local firm Abdul Karim J Al Fauri and Associates. On this transaction the firm advised in conjunction with CRA International.
CRA is a global consulting firm specializing in litigation, regulatory, and financial consulting, and management consulting. CRA advises clients on economic and financial matters pertaining to litigation and regulatory proceedings, and guides corporations through critical business strategy and performance-related issues. Headquartered in Boston, CRA has offices throughout North America, Europe, the Middle East, and Asia.
Trowers & Hamlins and CRA have worked together on several other successful assignments advising the government of Jordan. Most recently, the two firms worked on the oil shale concession agreement granted to Enefit in 2010 and on the downstream restructuring in Jordan. CRA International and Trowers & Hamlins continue to advise the government of Jordan on other oil shale concessions.
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