Development activity

Ma jor research and development areas in 2017:

  • The MARPOL analysis of the impact of changes in quality requirements for marine fuels, adaptation strategy
  • Increasing the oil shale processing capacity of Petroter equipment and net oil yield
  • Developing the mathematical model and the algorithms of the optimization of production

Improving the efficiency

Since 2013, we have been using the diagram of the flows of energy as a means of communication within the system of management of the energy efficiency of increasing the value of oil shale. Until then, major changes originated from the implementation of the Petroter technology with high energy efficiency and the termination of production of oil shale for storing at a warehouse. Since in the mine, it is not possible to excavate only the dimension stones used at Kiviter oil plants, in 2014 we were forced to store 30% of excavated oil shale energy at the warehouse in the form of fine-grained oil shale. Since 2015, we have not been producing oil shale for storing at the warehouse, and in 2016, the volume of oil shale that had earlier been produced for storing at the warehouse made 31% of all oil shale energy produced at oil plants. One of the most important opportunities as well as one of the steps aimed at improving the efficiency within the chain of increasing the value of oil shale, taking us into 2017, was increasing the processing capacity of net oil yield and oil shale at Petroter plants. In 2016, preliminary studies for increasing the processing capacity of net oil yield and oil shale at Petroter plants were held and the most important technological solutions were developed. In terms of the project of regeneration of the gasoline fraction of char gas, modelling was carried out, and a further detailed cost-benefit analysis was prepared. A decision was made to deal with the implementation of the project later, after 2017.

Production model
The year 2016 was a year of tough calls and tricky decisions for VKG. Due to exceptionally low prices for oil, it deemed urgent to decrease the load at Ojamaa mine and stop Kiviter oil plants. While making this decision, the key factors were a large reserve of fine-grained oil shale that had accumulated at the warehouse in preceding years and the need to improve the liquidity of the entire Group. Besides, while making this decision, we have been guided by thorough calculations and production models. We are sure that modelling will enable us to make decisions in the nearest future that will help to improve the financial and economic efficiency of the chain of increasing the value of oil shale. In 2016, we continued to develop the mathematical model of oil shale production and the algorithms of optimizing performance. We are planning to validate and launch the advanced optimization production model in 2017.

MARPOL strategy
About 85% of oil shale produce is sold to the largest global suppliers at the fuel market, who use oil shale mainly in the world ocean as one of the components while producing marine fuels outside of the areas using the control over the amount of emissions. At the 70th session of the Marine Environment Protection Committee, which took place in the end of October 2016, it was decided to set the date of implementation of the marginal rate of sulphur content in marine fuels at the rate of 0.5% in the world ocean for 1 January 2020. According to the forecasts of the most renowned agencies, revolutionary changes are going to accompany the implementation of this marginal rate at the market of marine fuels. We have also been considering the implementation of the new 0.5% rate of sulphur content as of 1 January 2020 as the basic scenario for VKG, which is why in 2016, the main focus was and in 2017, the main focus will still be on preparing the impact analysis and the adaptation strategy for VKG.