In a blow to strategists' dreams of burgeoning worldwide oil shale investment, officials say Eesti Energia needs to rein in its activity on that front.
Among other things, the new caution has been prompted by Moody's dropping the state energy company's credit rating a notch on Tuesday. The company is now down to Baa2 from Baa1, with outlook remaining stable. The ratings agency said reasons included the integration of Baltic and Scandinavian power grids; possible rises in the price of carbon credits also leading to higher costs of producing energy from oil shale; the high level of risk of the investments made into shale oil production; and the company's high debt load.
Postimees quoted Finance Minister Jürgen Ligi as saying that the lowered ratings are affecting all energy companies in Europe. "It hasn't affected Eesti Energia finances negatively and the current rating is high. Still, there are various risks and the investing activity must be made more conservative. Investments will also drop in the near future and a return is expected. The result depends significantly on resolving technical problems in the oil industry," Ligi said.
Ligi is the official directly in charge of the state company after Eesti Energia was transferred from the Economic Affairs Ministry to the Finance Ministry's jurisdiction last March.