Estonia's national energy company Eesti Energia has decided to wrap up its business activity in the United States. The company owns land and rights to 3.5 billion tons of oil shale in the state of Utah, which it estimates could take around a year to sell.
Finance Minister Mart Võrklaev (Reform) last week approved a decision taken at Eesti Energia to liquidate four of the group's U.S. businesses. They are the EAO Orion LLC, EAO Technology LLC, EAO State Leases LLC and EAO Federal Lease LLC.
Eesti Energia board member Raine Pajo said that the companies are not valuable in themselves, while their liquidation if part of a wider process.
"Our plan is to wrap up business activity in the USA. The companies used to hold land or license rights and there were costs associated with maintaining them. We are reorganizing our structure to end this and avoid confusion." Pajo said.
Around a decade ago, Eesti Energia had plans for developing the oil shale industry in Utah. The company said in a press release from that period that it wanted to reach an output of 57,000 barrels of shale oil per day.
Minister Võrklaev described Eesti Energia's American venture as neither profitable nor promising.
"I commend the current board of the company for critically revisiting past ventures, and, unfortunately, we can see that a mistake has been made. While no one is infallible, the mistakes numbered quite a few, so we are seeing unnecessary and unpromising projects being wrapped up to get expenses back under control and concentrate more on the main business," Võrklaev said.
Eesti Energia will retain for the time being the Enefit American Oil Corporation that employs one full-time and one half-time employee and its subsidiary Real Estate Corporation. The latter owns the land and oil shale resource in Utah. The company owns three plots totaling a few hundred square kilometers and holding an estimated 3.5 billion tons of oil shale.
Pajo said that Eesti Energia's USA project is worth €31 million. The loss the company is looking at remains unknown at this time.
"It depends on our exit, how the sale will go. The process could take about a year, which is when we'll know more," the remarked.
Editor: Mirjam Mäekivi, Marcus Turovski