Jordan issues call for oil and gas development partners

Out-Law News | 26 Aug 2014 | 10:27 am | 1 min. read

Jordan’s government has reportedly issued a call for tenders for oil and gas exploration in two blocks in the country’s northeastern region.

The Dubai-based Zawya news agency said Jordan’s energy and mineral resources ministry is calling for tenders to explore the Sarhan and Azraq blocks in the country’s Mafraq governorate, 80 kilometres northeast of the Jordanian capital Amman.

Zawya said the deadline for submitting tenders in terms of prospective production-sharing agreements between Jordan’s government and the bidding companies is 20 October.

Energy minister Mohammad Hamed said in a recent interview with The Jordan Times that the National Petroleum Company (NPC) would continue gas exploration in the eastern Risha field, near the border with Iraq, after BP ended its oil drilling operation in Jordan early this year “due to unsatisfactory results”.

An energy master plan strategy (26-page / 768 KB PDF) published by Jordan’s government in 2007 said investment of nearly $3 billion was needed in the country’s energy sector over the next 10 years.

According to the plan, Jordan is divided into nine blocks for oil and gas exploration, including Risha. The plan said the NPC wanted a venture partner to develop Risha, where “there is still potentially significant undeveloped gas”.

In a related development, Jordan’s government has cancelled plans to accept proposals to build five wind turbine plants with a total capacity of 400 megawatts, the Amman Stock Exchange (ASE) Daily Market Report published by Awraq Investments on 24 August (4-page / 640 KB PDF).

According to the report, Jordan’s energy ministry cancelled the projects due to existing constraints on the national grid.

The World Bank has said major infrastructure investment is needed in Jordan to help face a number of challenges, including vulnerability to fluctuations in the oil market because of the country’s dependency on energy imports.

The bank said: “The greatest challenge for Jordan, and also the largest opportunity, remains the necessity to create conditions for increased private investment and improved competitiveness.”

In its fiscal country partnership strategy for Jordan for 2011 to 2015, the bank said: “Since February 2011, repeated disruptions in the Egypt gas pipeline, which supplies 70% of Jordan’s gas, have resulted in a four-fold increase in Jordan’s energy bill due to the need to substitute costly heavy fuel for gas.”

In October 2013, Jordan said Russia had been selected as the preferred bidder to build the country’s first nuclear power plant, in the Amra region, some 60 kilometres east of the eastern city of Zarqa.