Jordan’s top energy resources regulatory agency – the Natural Resources Authority (NRA) – said that the government’s multi-billion dollar oil shale agreement with energy major Royal Dutch Shell PLC (RDSA) has come into force this week.

Shell’s subsidiary, the Jordan Oil Shale Company B.V., is currently in the process of setting up offices and ordering equipment, while preparing for the project’s first stage, comprising of three years of shale exploration activities.

Last month, the Jordanian Parliament approved the project, under which the Anglo-Dutch company will explore and extract oil shale reserves from an area encompassing 22,000 square kilometers in the north, south and northeast regions of the kingdom.

Shell is expected to spend around $340 million on exploration, assessment and designs of the project and pay some $150 million to the Jordanian government over the three stages of the exploration, which entails the firm’s patented ‘in situ conversion process,’ under which the ground is heated over several years to extract shale in oil form. The oil supermajor is expected to take a call on the project’s viability at the end of each of the first two stages.

If feasible, the project could eventually cost several billion dollars and will start producing commercially by the late 2020s.

Jordan is thought to contain some 40 billion metric tons of proven oil shale reserves, a figure which may even be doubled. Oil shale refers to organic-rich fine-grained sedimentary rocks from which oil can be obtained by heating.

The Royal Dutch Shell PLC owns one of the largest integrated oil and gas businesses in the world. The group has operations all over the world and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources and other energy related businesses.

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