The N-T-U retort is an internally fired, batch type process which is self sustaining from the standpoint of fuel. Heat for the process is obtained when air, mixed with circulated product gas, is passed through the shale bed and the residual organic material is burned from the shale. A distillation zone is formed just below the combustion zone as a result of heat exchange between raw shale and the hot gases issuing from the combustion zone. The oil and vapors formed are withdrawn from the bottom of the retort and pass to a condensing system.