Energy, Estonia, Legislation, Markets and Companies

Minister of Finance Toomas Toniste made a proposal to the government to allocate 940,000 euros from the reserve of the Government of the Republic to the Ministry of Economic Affairs and Communications and 60,000 euros to the Ministry of the Environment for covering the expenses that are to emerge from the acquisition of properties and usufructs located on the territory of the extracting permit area of the second oil shale quarry of North Kivioli in the rural municipality of Luganuse in East-Viru County.

However, the government at a sitting held on Jan. 3 decided not to discuss this point of agenda, government spokespeople said.

Kivioli Keemiatoostus, a subsidiary of Alexela Group, which is owned by Heiti and Marti Haal, on Nov. 11, 2009 submitted an application for the expropriation of the usufructs established on the properties.

In 2017, active measured resources totaled 13.8 mln tons in the second quarry of North Kivioli, of which 5.8 mln tons was on the area of the right of use of land. The rest is located on the disputed properties, where the size of the oil shale resources is approximately 8.5 mln tons, of which 8 mln tons can be mined. The state's tax receipts from the mining and processing of it are approximately 55 mln euros.

The owner of the land is energy producer N.R. Energy, owned by Nikolai Reisman. Reisman has previously wanted to earn a significant amount should the state make an offer in the expropriation, or mine oil shale himself, claiming that the owner of the land has the right to the oil shale resources located under the land.

According to Estonian law, the landowner does not have the right to the underground mineral resources, which are owned by the state. As Kivioli Keemiatoostus and Reisman have not reached an agreement regarding the sale of the properties, Kivioli Keemiatoostus already in 2009 submitted an application for establishment of compulsory possession of the properties in the possession of the owner and the expropriation of the usufructs.

Ahto Tisler, member of the management board of N.R. Energy, on Dec. 26 turned to the public and claimed that the government coalition is trying to push through the expropriation in secret, in a hurry and based on direct misinformation.

"Kivioli Keemiatoostus OU, which is part of the Alexela Group, is a private company like any other. The state has no need whatsoever for giving an approximately 150 mln euro gift at the expense of other private persons and companies to a private company operating under market conditions. There is no public interest in this process -- in the worst case, this is illegal state aid. If the state's interest is to earn income from the tax paid on mineral resources, this tax could all the same be paid by the current legal owners of the land, who carry out the mining themselves," Tisler said.