Eesti Energia will start developing US oil shale industry

Eesti Energia has signed an agreement by which it will acquire 100% of Oil Shale Exploration Company (OSEC), a US company with one of the largest tracts of privately owned oil shale properties, and was awarded the only oil shale research, development and demonstration lease in Utah. OSEC is an oil shale exploration and development company that has been involved in shale oil development since 2005. Eesti Energia is planning to construct an oil shale plant with a capacity of 57,000 barrels of shale oil per day at full production.

„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," commented Eesti Energia's CEO, Sandor Liive.

By acquiring OSEC, Eesti Energia will obtain over 3.1 billion tons of in place oil shale that contains nearly 2.1 billion recoverable barrels of oil. The development phase of US project is estimated to take 4 years followed by a construction period of 3 years.

„The economic benefits are expected from growing the value of the project through the development phase and from selling our unique oil shale processing technology in the US," explained Sandor Liive. Similar to Jordan, Eesti Energia would look to acquire a strategic partner in US project in the development phase and will provide valuable work for Estonian scientists and experts.

According to Liive, the OSEC project is the best US opportunity based on location, resource, feasibility and geological studies done to date. Liive added: „Also, remarkable work has been done in developing relationships with the local community and other key stakeholders for the project." OSEC is the only company awarded an oil shale research, development and demonstration lease in Utah by the US Bureau of Land Management.

Once the transaction has closed, Eesti Energia will focus on developing its oil shale projects in Estonia, Jordan and the US. Eesti Energia will be both the developer of international projects and a provider of the Enefit technology for shale oil production. In other oil shale countries Eesti Energia would concentrate on technology sales.

The transaction will close after the approval from Committee on Foreign Investment in the United States (CFIUS) is received. According to the agreement between the parties, the price of the transaction will not be disclosed.

Eesti Energia (internationally known as Enefit) is an international energy company operating in Estonia, Latvia, Lithuania, Finland and Jordan. Eesti Energia is engaged in oil shale mining, oil shale based electricity and heat generation, shale oil production, electricity distribution, and selling electricity and other products to retail customers.

Eesti Energia is one of the largest companies in Estonia with total revenues of 796 million Euros and EBITDA of 245 million Euros as of 31 December 2010.

Marina Bachmann
Press Officer
Eesti Energia AS
Phone: 71 51 218
GSM: 56 456 600