It seems that cheap oil has taken a toll on energy-hungry Jordan as investors, who planned to tap the Kingdom’s abundant shale oil deposits, seek to put their investments on hold, at least for now.
Oil, which is now in the vicinity of $45 a barrel, makes it very difficult for frackers to take the plunge and press ahead with much costlier oil extraction projects.
According to industry sources, a barrel of shale oil costs approximately $80, while current prices are almost 50 per cent lower.
The Jordanian government has recently set up a committee to negotiate with oil shale investors, who have already secured concession areas, to reach what Al Ghad described as “understandings” over possible deferral of their ventures.
Over the past 12 months, crude oil prices tumbled from $80 a barrel from this time last year to nearly $45 a barrel at present, with sustained downbeat projections that recovery might take longer than expected.
Jordan, which has already sealed deals with a number of foreign companies to invest in its shale oil reserves, imports some 97 per cent of its energy annually at roughly 18 per cent of its gross domestic product.
($1 = AED3.67, at the time of publishing)