Denver (AP) Shell Frontier Oil and Gas is withdrawing a state mining permit to start work on experimental oil-shale operations on federal land.
The company says it wants to refine its process at its private test site near Meeker first.
Shell spokeswoman Jill Davis says the company wants to gather more information about its process that heats the shale in the ground to extract the oil.
Results from Shell's test site are expected in late 2009 or 2010.
Shell is one of three companies to win ten-year leases on 160-acre parcels of federal land in Northwest Colorado and Eastern Utah for research and development projects in oil shale.
The projects are seen as setting the stage for commercial- scale development of oil shale.