Eesti Energia's profits from sales in the second quarter totaled €177 millin, an increase of 19 percent on year. Commercial profit before the deduction of costs, or EBITDA, reached €64 million for the quarter, an increase of 17 percent over the previous year, according to a company press release.

Eesti Energia CFO Andri Avila said that such a good result was achieved primarily due to an increase in the production of both electricity and shale oil. "The average market price of electricity has not changed much, as compared to last year, but the market price for shale oil has significantly improved," he explained. "The price of carbon dioxide quotas int the second quarter was also more profitable for the energy producer than in the previous year. As a result of the combined influence of these factors, the production of both electricity and shale oil has significantly increased."

The CFO noted that the increase in the competitiveness of shale energy production was positively influenced by the linking of natural resource payments to the world price of oil. "A flexible taxation system allows the industry to survive hard times, to retain jobs and, in the case of high market prices, it also provides more income from taxes to the state," Avila said.

During the second quarter, Eesti Energia generated 2.4 terawatt-hours of electricity, 43 percent more than during the same quarter last year. "The figures clearly show that Eesti Energia's dispatchable production facilities, which are operating on the shale, are good at competing in the regional market and are needed throughout the region," said Avila. "For the first six months of this year, Estonia exported more than 1.6 terawatt-hours of electricity to Latvia and Finland. Such a volume represents 20 percent of the total annual consumption of Estonia. If the average price for electricity in Estonia in the first half of the year was €32 per megawatt-hour, it means that about €50 million of export income. Eesti Energia's electricity production constitutes about 90 percent of the electricity production in Estonia." Estonia is the only country out of the Baltics and Finland in which the volume of electricity production exceeds domestic consumption.

Second-quarter shale oil production up 87 percent

Eesti Energia Group produced 106,000 tons of shale oil during the second quarter, an increase of 87 percent over the same period last year. "Last year, due to very low market prices for shale oil, we moved the schedule of servicing works at the shale oil refineries to the first half of the year, and for this reason, production volume is now 49,000 tons greater than a year ago," Avila said. "Production volume and profit from sales are primarily determined by the market price, which increased by 45 percent compared to the previous year, reaching an average of €261 per ton. The sales of shale oil also make a significant contribution to Estonian exports, as we sell the bulk of this volume outside of Estonia." Eesti Energia's next-generation oil, electricity and gas production plant Enefit 280 produced half of the volume of Eesti Energia's shale oil.

According to Statistics Estonia data, Estonia's economy grew by 4.4 percent in the first quarter, with a significant contribution to this growth being made by the oil shale industry. "Analyzing Statistics Estonia's data, it can be argued that about one quarter of Estonia's economic growth in the first quarter was achieved thanks to the shale industry — the extraction of raw shale and the production of electricity and oil from it," noted the CFO. Statistics Estonia has not yet published economic growth figures for the second quarter.