Firm buys holder of oil-shale lease

Estonian company to develop Utah parcel

An Estonian company that has pioneered oil shale in eastern Europe purchased the company that holds the only oil shale demonstration lease in Utah.

Enefit’s purchase of the Oil Shale Exploration Co. will be a boon to the United States, the head of Enefit said.

“It is a unique opportunity for Estonia to be able to provide one of the largest countries in the world with something they need, technology, which enables them to utilize their domestic oil shale resource and therefore increase the country’s energy independence,” Enefit CEO Sandor Liive said in a statement.

The agreement is pending before the Committee on Foreign Investment. Terms of the stock-purchase deal were not disclosed.

Enefit, which is called Eesti Energia in Estonia, said it plans to build an oil shale plant that would produce 57,000 barrels of shale oil per day at full production.

Enefit has been in commercial production in Estonia since the 1980s, producing nearly 1.3 million barrels of shale oil per year from a surface retort.

Enefit “has continually improved their technology,” said Glenn Vawter, executive director of the National Oil Shale Association. “They’ve made some money at it, and now they’re trying to take advantage of their expertise.”

In purchasing OSEC, which was formed in 2005, Enefit will obtain a resource containing the equivalent of nearly 2.1 billion barrels of oil, Enefit said.

The acquisition of OSEC puts Enefit in “a strong position to be one of the first, if not the first, successful commercial shale oil projects in America,” the company said.

OSEC had ties to Petrobras, a multinational energy company headquartered in Rio de Janeiro, and Mitsui & Co., a Japanese investment and trading company, and was working with OSEC to build in Utah a gas-combustion retort similar to one Petrobras has operated for 30 years in Brazil.

The Enefit 280, a second-generation shale plant set to open in 2012 in Estonia, will process 2.3 million tons of shale per year, producing 2.1 million barrels of shale oil. It also will generate 35 megawatts of electricity, which will run the plant and provide a surplus into the grid in Estonia, the company said.

OSEC’s 160-acre research-and-development lease on federal land includes the White River shale mine. The lease is included within 30,634 contiguous acres in the Uinta Basin that are estimated to contain the equivalent of 2.1 billion barrels of oil.

In addition to OSEC, Shell owns three federal research-and-development leases, all of which are in northwest Colorado. Chevron and American Shale Oil LLC hold one lease apiece.


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