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Brief history of the country
Estonia (the Republic of Estonia) lies in the Baltic region and is bordered to the north by the Gulf of Finland, to the west by the Baltic Sea, to the south by Latvia and to the east by Russia.
Permanent settlements are recorded in Estonia from the 1st Century after which a provincial administration emerged in this strategic location. Denmark laid claim in 1206 and it was variously owned by Denmark, Germany, Poland and Lithuania.
In 1561 northern Estonia was taken over by Sweden, followed by Livonia in the south in 1629. The Swedish empire lost the region to Russia in 1721 and serfdom was abolished in 1816.
A nationalist movement developed and Estonia finally declared independence in 1918 after the Russian Revolution. However, in 1940 it was invaded by the Soviet Union and annexed as the Estonian Soviet Socialist Republic.
Ruled by Germany from 1941 to 1944 it was re-conquered by the Soviets who then deported large numbers of people.
A new independence movement grew from 1987 as the Soviet Union collapsed and in 1991 it declared independence again. The last units of the Russian army left in 1994. It now has a successful market economy.
Oil and gas summary
Estonia, on the east of the Baltic Sea, lies on the level northwestern part of the East European platform with an average elevation of just 50 m. The coastline comprises numerous bays, straits, inlets and islands.
With its shallow basement on the geologically stable Baltic Shield, Globalshift believes that Estonia has no conventional oil or gas potential, onshore or offshore in the Baltic Sea or Gulf of Finland. However, the country has large reserves of kerogen-rich oil shale of Ordovician age in the east at shallow depths. It has mined this resource as an energy source since 1921. Most was used directly in power and heat generation or exported to other power plants in Europe although some oil has been processed in retorts. From 1948 to 1987 small volumes of shale gas were used locally and across the border in Russia.
The shale oil industry is expensive and environmentally damaging. It relied on subsidy in the Soviet occupation. In the early 21st Century new investment and technology improved the economics and the industry expanded. Environmental activism probably points to future decline, especially as Estonia grows its LNG imports.
ESTONIA
Map and National Flag
EASTERN EUROPE
Ship in harbour
Eastern Europe
Capital
Population
Land area (sq kms)
Oil prod (000s b/d)
Gas prod (bcm/yr)
Oil cons (000s b/d)
Gas cons (bcm/yr)
Tallinn
1.4 mm
45,227
None
None
27
0.75
Government
Estonia is a parliamentary representative democratic republic in which the Prime Minister is the head of government.
The parliament has 101 members who appoint the high officials including the President. The country joined the EU in 2004 and it is in the Eurozone.
The Ministry of Economic Affairs and Communications is responsible for the energy industry in Estonia.
There have been 3 shale oil producers; Viru Keemia, Eesti Energia and Alexela Energia.
Geology and History of Exploration
Estonia lies on the northwestern part of the East European platform (the Baltic Shield). A few onshore exploration wells have been drilled intermittently since the 1950s but otherwise Estonia has no history of drilling or conventional oil and gas production. Without suitable sedimentary basins, Globalshift regards the country as having no oil and gas potential onshore or offshore. However, Estonia does produce oils retorted from oil shales.
The oil shale industry - in Estonia is the most developed in the world. Graptolitic argillite is a marine black shale deposited during the Early Ordovician. Kukersite is a light-brown marine Late Ordovician oil shale. Both form the Baltic Oil Shale Basin in eastern Estonia from which the shales are mined.
Its use in industry commenced in 1916 and production of shale oil began in 1921. Oil shales were used to generate electrical power in 1924. After World War 2, Estonian oil shale gas was also used in Saint Petersburg and in northern cities in Estonia as a substitute for natural gas.
Large oil shale-fired power stations were eventually constructed and extraction peaked in 1980. Demand then reduced that with the advent of nuclear power in the Soviet Union, followed by the break-up of the communist regime.
Oil shale mining started to increase again at the beginning of the 21st century as the global oil price rose. In 2015 around 70% of mined oil shale was used for electricity generation, accounting for about 85% of Estonia's total electricity production. A small proportion of the mined oil shale is also used to produce shale oil which makes Estonia the second largest shale oil producer in the world after China. In addition, oil shale and its products are used in Estonia for district heating and as a feedstock material for the cement industry.
The industry is environmentally hazardous. In 2012, the industry produced about 70% of Estonia's ordinary waste, 82% of its hazardous waste, and more than 70% of its greenhouse gas emissions. Activities lower groundwater levels, and spoil water quality. Water pumped from the mines and used by oil shale-fired power stations has exceeded 90% of all water used in Estonia.
The National Development Plan for the Utilisation of Oil Shale 2008–2015 prioritised oil shale as a resource for ensuring Estonia's electricity supply and energy security. However, the share of oil shale in the country’s electricity and heat production is decreasing due to the European Union's climate policy and its local environmental impact.
Estonia is diversifying the national energy balance and has begun to import LNG.