Jordan OKs Gas Field Deal Between BP, NPC
In the session held Oct. 7, chaired by Jordan's Prime Minister Nadir al-Dhahabi, the Council of Ministers approved the partnership agreements between the National Petroleum Company (NPC) and the British company British Petroleum (BP) for the concession of the Al-Rishah gas field, including the agreements for amending the concession, execution, share remittance, and operation.
Khaldun Qutayshat, minister of energy and mineral resources, said that under these agreements, the British company will participate in two phases. The first is the phase of exploration and evaluation for a period of three to four years that is extendable for one more year, during which the company undertakes to spend 237m dollars on exploration activities, including three-dimensional seismological surveying, drilling wells, and conducting studies. The company will also pay 20m dollars as a grant to the government when the law endorsing the agreement goes into effect. In this phase, the NPC will continue with the production activities and the management of the field and will keep the production up to 50m cubic feet per day, which is the maximum capacity of the existing installations, while the NPC will share the revenues from selling gas with the government 50-50.
The energy and mineral resources minister noted that in light of the positive results of the exploration phase, BP will enter the second phase; that is, development and production, after it announced that the project is commercially viable, and will carry out comprehensive development of the field. He said that the size of spending is estimated at between 8-10bn dollars. He added that the expected volume of production will range between 330m and 1bn cubic feet per day.
The average daily amount of natural gas, which is imported from sisterly Egypt at present, is around 320m cubic feet daily.
Dr. Nabil al-Sharif, minister of state for media affairs and communication, said that BP, on behalf of the government and the owner of the concession, the NPC and BP, will sell the gas locally and internationally, while it will share the profits with the government, after recovering costs, at the rate of 50 percent for the government and 50 percent for the owner of the concession.
Al-Sharif noted that in the event of producing oil, profits will be shared at the rate of 55 percent for the government and 45 percent for the owner of the concession. Also, the owner of the concession, the NPC and BP, will share profits between them in proportion to the amount of production and at a rate of 1 to 10 percent, based on the daily production rate.
Al-Sharif said that BP will pay the government a grant of 30m dollars once it makes the final decision on developing the field, after signing the agreements for selling gas.
The concession period extends until the year 2046 unless it is extended for a maximum period of eight years until signing the agreements for selling gas, which will be produced during the period of development.
The minister of state for media affairs and communication said that this project is considered to be one of the important projects for Jordan.
He added that once the company succeeds in reaching the targeted levels, this project will effectively contribute to achieving energy security and meeting Jordan's needs of this material, especially in the sectors of electricity generation and industry. The project will also allow the possibility of exporting this material if high levels of production are achieved.
BBC Monitoring. Copyright BBC.
Operates 32 Offshore Rigs
- BP Returns To Solar With Investment In Lightsource (Dec 15)
- BP: 2017 'Massive' Year for Global Upstream Projects (Dec 07)
- BP Seeks Stake In Cairn Energy Senegal Assets (Nov 20)