Chairman´s letter
Table of contents


Dear reader,

Our mission is the valorisation of the most important Estonian natural resource, i.e. oil shale. We have set a goal of becoming the leading company in the group in terms of opening up the oil shale potential. Currently, VKG is capable of transforming 90% of the energy contained in oil shale, producing all in all 627,000 tons of oil shale products and 1 TWh of special energy.

Nowadays oil shale is valuable mainly within the context of the global oil market, which is why the Estonian oil shale sector has taken the irreversible direction towards the production and boosting the value of shale oil, first and foremost. Owing to extensive experience that accounts for decades, large-scale investments, and the ongoing development works we have become capable of being competitive at the market that is expected to grow by 1.2% on the average within the next five years. Slower growth of the so-called older economies is compensated mainly by China and India, whose estimated share in the growth of energy consumption makes 44%..

In 2018, there was a change at the energy market that remained unnoticed for an ordinary consumer, namely the price of 1 ton of CO2 quota rose by three times as compared with the beginning of 2018, i.e. it reached 25.3 euros/t (8.2 euros/t). In a large-scale perspective changes in CO2 prices at the market demonstrate that the need for the internal restructuring of the oil shale energy industry as well as directing it towards the production of oil shale is unavoidable. The electricity with a high footprint of CO2 that is generated by means of direct combustion is no longer competitive within the context of low prices for electricity, and the national energy politics should take that into consideration. The basis for the economic competitiveness is to provide energy to consumers in the required amount, time, and at affordable prices. In spite of an increase in the share of renewable energy in production, oil shale electricity, which in the future will rather be produced from the char gas generated in oil production, still remains the only plausible solution ensuring the provision of the security of supplies.

VKG has been doing really well in the midst of all those changes. We have taken our production volumes to the best possible level and rather concentrated on enhancing the quality of our products and improving energy efficiency. We can see unused potential both in boosting the value of oils and char gas as well as increasing the rates of automatisation. Demand for oil products has been boosted significantly by the fact that foreign companies have become increasingly interested in the Petroter technology, which has proved to be extremely efficient. The solutions that have been created in the result of ongoing development works and patented is a value whose export potential is clearly gaining momentum..

The global energy market is setting the framework for the Estonian oil shale in terms of economic sustainability. However, in order to ensure long-term competitiveness, it is extremely important that work is done in a smart, environmentally-friendly, and socially acceptable manner. „Energy saving“, „waste-free production“, „CO2-neutral economy“ make up just a short list of goals, towards which every single company is striving nowadays.

The acceptance of the effect of production on society is the cornerstone of VKG activities. In 2018, we held a number of projects aiming at the reduction of the amount of dust and aromatic substances generated in the course of production, recycled the entire volume of oil shale waste rock obtained in the course of excavation works, and started updating the methods of measuring the environmental effect. The companies operating in the oil shale energy industry as a whole have made the activities and goals related to the environment an inseparable part of their daily operations. The investments that have been made have brought us to the point where the effect of the oil shale industry on the air quality in Estonia has dropped to the fourth place, transport, agriculture, and chaotic urbanization coming first, second, and third.

In 2019, it will be 95 years since the start of shale oil production in Estonia on the production territory of modern VKG.

Out of the entire range of VKG employees, chemists, miners, and power engineers carry along with the traditions, knowledge, and experience accumulated throughout the years. I would like to thank all of the current and former VKG employees for being capable of keeping and developing the most important Estonian natural resource, i.e. oil shale, at the global market as a competitive energy source.

Ahti Asmann

Chairman of the Board of Viru Keemia Grupp