Index

4Impact of the
external environment

As a producer of shale oil products, VKG operates in a field where a company’s performance largely depends on developments in the external environment, mainly in three areas.

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Economic environment

Shale oil as VKG’s main product competes with ither fuels in a globally open raw materials market where the balance of demand and supply depends on the overall economic environment and the decisions of producers with significant market influence.

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Regulative environment

Political decisions made at the European Union level as well as at Estonia’s level are like a strong headwind that impedes VKG’s competitiveness in the fight for its place in the global market of oil products.

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Availability of raw material

The availability of oil shale as VKG’s main production input depends on national decisions concerning the shaping of and compliance with the oil shale distribution system, but in competition with a state-owned company such decisions tend to be favourable towards the state-owned company.