Gas, oil exploration deal signed with new investor

AMMAN — The National Petroleum Company and IPG, a UK-based company, signed a production sharing agreement on Tuesday to explore for oil and gas in the eastern parts of the Kingdom.

Under the deal, IPG will work on increasing output from Al Risheh gas field to reach around 50 million cubic feet per day during the first year of the contract. Currently, gas output from Al Risheh gas field is around 12-13 million cubic feet per day.

“This is a very important agreement for Jordan to increase production from Al Risheh gas field and explore for oil and gas in Al Safawi area,” Minister of Energy and Mineral Resources Ibrahim Saif said on Tuesday at a press conference to sign the deal.

The four-year agreement can be prolonged for one more year, said the minister.

Egyptian investor and owner of IPG Yehya Al Koumi, whose company was granted concession rights to explore for gas and oil in Al Risheh gas field and Al Safawai area near the borders with Iraq, said the company enjoys international expertise and is home to world-renowned experts in the area.

“We hope that after the four years, we will be able to increase gas output to 300 million cubic feet per day,” said Koumi at the presser.

Under the deal, IPG will spend around $100 million over the next four years, according to Qutaiba Abu Qura, chairman of the National Petroleum Company.

Jordan needs around 400-450 million cubic feet of gas per day, according to Abu Qura.

Early in 2014, Prime Minister Abdullah Ensour announced that British Petroleum ended its oil drilling operation in Jordan after unsatisfactory results on its second well in the country. 

Following that, the government floated several tenders to attract companies to explore for oil and gas in Al Risheh gas field and Al Safawi area.

Jordan, which imports about 97 per cent of its energy needs annually, incurred losses worth billions of dinars due to repeated cuts in natural gas supplies from Egypt. 

In mid-2015, Jordan opened a terminal for liquefied natural gas (LNG), which enabled the country to import LNG, mainly for electricity generation. 

According to the National Electric Power Company, around 80 per cent of the country’s electricity is generated by gas.