A few months ago both state-owned Eesti Energia and competitor VKG were confident that they would soon be building refineries to turn shale oil into exportable diesel, the plans are now on indefinite hold.
VKG management board member Jaanus Purga said it proved too costly to finance the project. He said the refinery would have been profitable, but the company has borrowed too heavily and did not have a way to take any more loans, Postimees reported.
"The planned, nearly 400-million-euro investment is important and large in scale for VKG and Estonia, and thus all of the major inputs must be stable and in place for the long term," he said.
Purga said the company had no certainty regarding the oil shale extraction fees payable to the state, as at the end of last year the government raised the price of the fee for using natural resources.