10-06-08 Japan's second-biggest trading house Mitsui plans to work with Brazil's Petroleo Brasileiro (Petrobras) and an American start-up on a US project that aims to become the world's first to produce oil from oil shale in large quantities.
Mitsui and the Brazilian state-owned oil company will participate in oil shale development in the state of Utah at a mining site to which oil shale exploration has acquired development rights from the US government. Deposits are estimated at the equivalent of 3-4 bn barrels of recoverable oil, or roughly two to three years of Japan's overall annual consumption.

The three firms will take a year to conduct a feasibility study on development and production. After confirming the project's profitability, they plan to start commercial production of 5,000 to 10,000 bpd as early as 2013, with daily output to be raised to 50,000 barrels in stages.
Mitsui has reached an agreement to take an interest of 10-20 %, entitling it to receive up to 10,000 bpd, the report said, adding that the overall cost of the project is forecast to exceed $ 1 bn. Petrobras has proprietary technologies for processing oil shale using heat and now produces a daily 5,000 barrels of oil this way on a trial basis in that country.

Development of nonconventional oil sources, including oil shale and oil sands, had often been avoided in the past because of their much higher costs compared with traditional oil production. But developing oil shale is considered economical once crude oil prices reach $ 70-80 a barrel.
With crude approaching $ 140 a barrel, major US and European oil companies are considering such projects as well.