History
The project started in 1964 when Tosco, Standard Oil of Ohio, and Cleveland Cliffs Iron Company formed the Colony Development joint venture. The aim of the newly formed joint venture was to develop the Colony Oil Shale Project and to commercialize the TOSCO II technology. Starting in 1965 the consortium operated a shale oil pilot plant and in 1968 the Colony Development started preparatons to build a commercial-scale plant.
In 1969 Atlantic Richfield Company joined the project acquiring part of Tosco's stake. However the commercial project was delayed by economic uncertainties and then resurrected in the 1970s after the Arab oil embargo. In 1972 the consortium stopped the pilot plant and the development of the commercial plant was suspended in November 1974 when more detailed economic studies indicated a more than three times higher cost than previously anticipated.
In 1974 Ashland Oil and Shell Oil Company joined the project. In the late 1970s Standard Oil of Ohio, Cleveland Cliffs Iron Company, Shell and Ashaland Oil sold their shares to Atlantic Richfield Company. As a result of these transactions Tosco owned 40% of shares and Atlantic Richfield Company owned 60% of shares in the project.
In 1980 Atlantic Richfield Company sold its share to Exxon for $300 million. In 1981 the Colony Development started a construction of the commercial scale shale oil plant. On 2 May 1982 Exxon announced the termination of the project because of low oil-prices and increased expenses laying off more than 2,000 workers resulting in the date becoming known among locals as "Black Sunday". According to the shareholders agreement in a case of project termination Exxon had an obligation to buy out Tosco's shares. It paid $380 million worth of compensation.
During its existence the project produced 270 thousand barrels (43×103 m3) of shale oil.
Read more about this topic: Colony Shale Oil Project
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