AMMAN –– Oil shale is the “saviour” of Jordan’s economy, according to international oil expert Mamdouh Salameh, who warned that surging global oil prices may spark a larger financial problem for the Kingdom within few years.
In a lecture at the Jordan Engineers Association on Wednesday evening, Salameh, a World Bank consultant on oil and energy, indicated that Jordan’s oil shale deposits exceed 50 billion tonnes, 10 per cent of which can be extracted.
The utilised quantities can generate around 35 billion barrels, which he noted is larger than the US oil reserves.
“Jordan is not an oil-poor country. But it needs the political will and transparency to extract these large deposits,” Salameh said, elaborating that the cost of extracting oil shale in Jordan would be around $1 billion, which is only 22 per cent of the Kingdom’s $4.8 billion oil imports bill.
Responding to a question on the environmental impact of oil shale extraction, the economist played down environmental consequences, adding the “environment should be a secondary issue when it comes to Jordan’s economic and energy future”.
He indicated that the Kingdom’s oil consumption in 2012 is set to increase to 150,000 barrels per day (bpd) from 147,000bpd in 2011.
The rise in consumption will push up oil imports bill to over $6 billion this year, with the price to be based on $110 per barrel, to represent around 28 per cent of the gross domestic product (GDP).
The projected GDP for 2012 in current prices is $21.6 billion, Salameh said, citing statistics of the Central Bank of Jordan and international financial organisations.
Pointing out that in 2015, when oil shale extraction is expected to start, Jordan may export up to 3,000bpd, ending decades-long negative balance of payments.
Oil exports are projected to generate around $8.5 billion in 2015, according to Salameh, who expected international oil prices to reach $150 per barrel as increasing global demand is expected to outweigh supply.
In 2016 and 2017, the expert expected oil prices to touch the $160 per barrel generating over $14 billion for Jordan in exports.
Salameh is a technical expert with the United Nations Industrial Development Organisation in Vienna. He holds a doctorate in economics specialising in the economics and geopolitics of oil and energy and a postgraduate diploma in industrial management and marketing.
He has presented papers to numerous international energy conferences on the economics and geopolitics of oil and energy and has been frequently invited to lecture on these topics at universities around the world.