Estonian firm eyes Indian operations for extracting shale oil

Estonian firm eyes Indian operations for extracting shale oil

Tallin, Estonia: Eesti Energia AS, the largest energy company of Estonia with operations in Finland, Jordan, Latvia and Lithuania, is scouting for opportunities in India to start up operations for extraction of oil from shale.

“We have had a couple of enquiries from Indian companies and we are exploring the possibilities. We have the technology to process the shale. As the technology owner, we want to be the majority shareholder in any association," said Alo Kelder, head of business development, Eesti. He declined to name the companies.

Eesti believes it would be able to contribute towards the India’s search for alternative sources of energy to reduce its dependence on oil imports—78% of oil consumed in India is imported—putting emphasis on developing oil-shale reserves and gas hydrates, which are methane molecules trapped in ice.

Oil shale is fine-grained sedimentary rock containing organic material, called kerogen, to produce oil and gas upon distillation. Properly processed, kerogen can be converted into a fuel that is somewhat similar to petroleum.

Estonia is primarily dependent on oil shale to meet its energy needs and is among the few countries, such as Brazil, China and Australia, to successfully commercialize its production. Estonia has reserves of 507 million tonnes (mt) of oil shale and an annual production of 14mt.

Eesti uses oil shale to not only extract oil (1.8 million barrels per year) but also run power plants. The state-owned company has assets of €1.67 billion and annual sales of €585 million. It has an installed capacity of 2603MWe and provides power to 92% of the population. Of this, 90% is produced from shale.

“Eesti Energia’s entry would help harness the potential that the North-East offers and help India in reducing its import dependency for energy needs," says Akhil Sambhar of consulting firm Ernst & Young. “With the current level of oil prices, oil extraction from shale may prove viable."

Mint reported on 23 May that the Indian government is plans to conduct a detailed exercise to estimate India’s oil-shale reserves in the next five years and identify suitable technologies to exploit its potential.

India is thought to have large oil-shale reserves in its North-East, as shale formation is common in Assam, Arunachal Pradesh and Nagaland. The reserves are estimated at around 100 billion barrels.

India’s consumption of petroleum products is around 112mt a year. Though per capita consumption of energy in India is a fifth of the global average, 45% of the country’s primary industrial energy needs are met by oil and natural gas.