Tarblaster Technology Day Planning Document 04/12/08 Chris Dudgeon, OTM Consulting Ltd [email protected].

Tarblaster Technology Day

Planning Document

04/12/08

Chris Dudgeon, OTM Consulting Ltd

[email protected]

Objectives of Technology Day

• Engage interest of end-users• Start the rumour-mill going

• Understand end-user perceptions• Make sure we’re in good shape to go forward with the technology

• Verify in front of the right crowd who won’t throw rocks too soon

• Agree key activities

• Identify end-user preferences to access the technology• Explore potential business models

• Start to look for other investors

• Gain initial commitment

• CAPEX reduced by ~80%• I think this may be more important than 6 months ago, now that Shell

and StatoilHydro have each shelved CAPEX plans, with lower oil price. We may want to strengthen this proposition?

• Yes, I agree.

• Low energy consumption • Self-sustained with energy by combustion of about 12% of the

recovered oil. low value energy (the most heavy part of the oil)

• CO2 emissions reduced by 20-30%• Clean dry sand emitted – no wet tailings• No water consumption• Extraction and upgrading oil sand in one operation

• Output oil directly to refinery• Easy to scale up• Increased value of oil by:

• Increased API from 8 to 25 (need to confirm latest data…) Agree.• Reduced sulphur (50-60%) and metal (90-95%) content

Tarblaster Key Messages

Key Challenges for Mining-Based Operations

• Cost of operations, maintenance

• Overall recovery

• Quality of extracted bitumen and market acceptability

• Water use

• Energy use and natural gas dependence

• Air emissions

• Environmental footprint

• Let us see my calculations when we meet.

Source - Oil Sands Technology Roadmap, Alberta Chamber of Resources, Jan 2004

Tarblaster Introductory Text

Tarblaster is a process for the simultaneous extraction and upgrading of oil from oil sand, oil shale and other particle-oil mixes (e.g. sludge) in one operation, without the use of water or steam.

The basic process can be described in 5 key steps:

1.Oil sand is injected into a low high-temperature reactor, heated by partial combustion of the oil in the injected sand. Within the reactor, oil is stripped off the sand, and partial cracking also takes place.

2.The sand is then conveyed pneumatically into a riser by the hot gases, and routed to a cyclone.

3.Within the cyclone, the sand is separated from the stream and is returned to the reactor, and the solid-free gases are transported to a condensation system.

4.The condensation system is a dual procedure, avoiding formation of emulsions, and resulting in two streams of liquid oil and water.

5.The sand from the reactor is discharged continuously into a steam boiler which extracts the heat in the sand for steam generation, prior to final discharge of clean, dry sand.

• A test rig has been operating at SINTEF, Norway since July 2008

• Oil sand oil with an initial grade of 10 API has been extracted at 350C and upgraded to 25 API oil, at a production rate of 2 barrels/ day

• 15 hours of operation have been completed

Tarblaster a/s

• Technology developed by Tarblaster a/s

• Norwegian company

• CEO - Olav Ellingsen

• Investors include energy-sector VC

• Tarblaster will develop, refine and commercialize this revolutionary and highly beneficial technology, which offers substantial economic benefits to clients engaged in the extraction of oil from oil sand and oil shale.

Tarblaster Commercialisation Options

• License revenue (per barrel) from licensors• Sale of IP to operator or contractor• Own operation

Operating Principles

Invitees

• Established incumbents, with committed technology/ infrastructure (and environmentally challenged)

• New entrants, thinking about what to do• Contractors (eg Lurgi, Bantrell (Bechtel))• Government• Universities, PTAC?

Name Title Company Address 1 Address 2 Phone e-mail Comments

Shunlan Liu Programme Dir, Bitumen Upgrading Alberta Energy Research Institute

Suite 2540, AMEC, 801 - 6th Avenue S.W.

Calgary, Alberta, T2P

(403) 297-7089

[email protected]

Eddy Isaacs Executive Director Alberta Energy Research Institute

Suite 2540, AMEC, 801 - 6th Avenue S.W.

Calgary, Alberta, T2P

(403) 297-7089

[email protected]

Andrew Higgins CNR

Thomas Lockhart Manager, Upstream Technology Milan via TMN; interest in Congo applications

Ron D. Myers Manager, Facilities and Environment Research

Imperial Oil Resources

3535 Research Rd. N.W. Calgary, AB, T2L

403-284-7520/ 403-826-

[email protected]

Erdal Yildirim Executive VP Project Development Oilsands Quest Inc [email protected]

via John Hutchinson, EPI-V

Petro-Canada

Lorraine Whale Manager of Research Shell Canada 3655 36th Street NW Calgary AB, T2L 1Y8

403.284.6658

Bryan Gould Shell Canada via Clive Mather

John Broadhurst Shell Canada via Clive Mather

Graham Boje Shell Canada via Clive Mather

Gemma Keaney StatoilHydro [email protected] via Olav

David Layton Cuthiell Mgr. Tech. Services & Support Suncor Energy Inc 112-4th Ave SW, P.O. Box 38

Calgary AB, T2P 2V5

403.205.6876 [email protected]

Michael Singleton Director Technology Planning and Integration Strategy and Development

Suncor Energy Inc [email protected] via John Hutchinson, EPI-V

George Cymerman(or John Oxenford or Ted

Senior Research Associate Syncrude Canada

Herve de Naurois Strategy and Business Development, R&D

Total Paris via TMN

Catherine Laureshen Senior R&D Engineer Total E&P Canada ex Uni of Calgary, then AERI (head of

Murray Gray Director, Imperial Oil-Alberta Ingenuity Centre for Oil Sands Innovation

University of Alberta

Department of Chemical and Materials Engineering

Edmonton, Alberta,

780-492-7965 [email protected]

Prof. Robert Mansell University of Calgary

via Clive Mather

Format of Day

• Wednesday 21st January 2009• Calgary• 10.00am-3.00pm• See draft ‘flow of the day’ overleaf• Venue possibilities

• Hotel – convenient, smart, neutral

• Oil company offices, is any friendly to Tarblaster yet (eg StatoilHydro?) – credibility, endorsement, but could be seen as biased OUR NEW CONTACTS WITHIN StatoilHydro may be friendly.

• University – a bit utilitarian, emphasises techie credentials, any universities (particularly Uni of Calgary) engaged with Tarblaster yet? NO

• Research Institute (e.g. Alberta Research Council, in Edmonton and Calgary) – decent facilities, fairly neutral, may help to initiate local network

• Plus:• One-day trip to a materials handling plant on Tuesday

• Potential meetings with Govt officials on Thursday

Draft Flow of the Day

10.00 Welcome and introduction

10.15 Presentation of Tarblaster technology

10.45 Q&A

11.15 Identification of perceived strengths of technology

12.00 Sandwich lunch

12.45 Roadmapping 1: Identification of key challenges, possible solutions, and timeline

13.45 Roadmapping 2:Gauging interest in specific initiatives, such as co-funding development, hosting a pilot plant, etc

14.30 Conclusions and action plan

Presentation of sample boxes

15.00 End

• Where will the technology be best suited?????

Workshop Materials

• Presentation slides

• Video/ pan-and-tilt look-around test rig• Or live video-link to test rig in Trondheim?

• Process/ templates/ materials for facilitated roadmapping

• Takeaways• Bottles of tar sand, produced oil, sand• Professional brochure

Supporting Material

Economics (1)

Synenco (2) TarBlaster

Investments (3): 8 400 000 000 USD Investments (4): 375 000 000 USD

Capacity pr day 114 500 Barrels Capacity pr day 50 000 Barrels

Capacity pr year 41 220 000 Barrels Capacity pr year 18 000 000 Barrels

Oil price API 45 72 USD Oil price API 25 50 USD

Blending price -14 USD Blending price 0 USD

Net sale price 58 USD Net sale price 50 USD

Gross cash flow pr year 2 390 760 000 USD Gross cash flow pr year 900 000 000 USD

Gross year of payback 3,5 Years Gross year of payback 0,4 Years

(1) On a gross level meaning not included operational- and financial cost or tax(2) Source: presentation on Synenco.com (3) Reduce with USD 2,3 billion in assumed payment of land lease(4) Included investment in fuel trucks and front loaders (USD 100 mill)

Probably need to revise economic model, with latest oil-prices YES

Economics (2) –Tarblaster 50

Investments (1): 375 000 000 USD

Capacity pr day 50 000 Barrels

Capacity pr year 18 000 000 Barrels

Oil price API 25 50 USD

Cost pr barrel (2) -20 USD

Tax 25% -7,5 USD

Net sale price 22,5 USD

Net cash flow pr year 405 000 000 USD

Net year of payback 0,9 Years

(1) Included investment in fuel trucks and front loaders (USD 100 mill)(2) Included USD 1,25 pr barrel in license fee to Tarblaster AS and USD 2 pr barrel in land

lease

Probably need to revise economic model, with latest oil-prices YES

Economics (3) –Tarblaster 10 (add-on)

Investments (1): 44 000 000 USD

Capacity pr day 10 000 Barrels

Capacity pr year 3 600 000 Barrels

Oil price API 25 50 USD

Cost pr barrel (2) -10 USD

Tax 25% -10 USD

Net sale price 30 USD

Net cash flow pr year 108 000 000 USD

Net year of payback 0,4 Years

Probably need to revise economic model, with latest oil-prices YES