TARBLASTER A TECHNOLOGY FOR ”DRY” RECOVERY OF OIL FROM OIL SHALE WITH NO WATER CONSUMPTION EXTRACTION AND UPGRADING OF THE OIL IN ONE OPERATION LESS ENERGY CONSUMPTION LESS GHG EMISSION

AGENDA Introduction of the PETROMAKS program og user managed innovation projects by NFR Presentation of Tarblaster AS by CEO Olav Ellingsen The company About the project The technology challenges by Ph.D. Jørn Bakken SINTEF Energy Research AS R&D needs Time shedule Resources Open discussion about the project and input from NFR to an application

TARBLASTER AS CEO Olav Ellingsen www.tarblaster.com CEO Olav Ellingsen Incorporated by 88 shareholders from Norway, England, Sweden, Germany, Switzerland, USA and Canada Number of issued shares 11.000.000 CEO Olav Ellingsen Board of Directors: Chairman, lawyer Morten Borch, Oslo Engineer, Steve Kent, London Member, marketing investigator Bjarte S. Ellingsen, Oslo Member, engineer Olav Ellingsen, Oslo

R&D PARTNERS SINTEF ENERGY RESEARCH AS, Trondheim Professor Jens Hetland Ph.D. Jørn Bakken NYHAVNA MEKANISKE AS, Trondheim Engineer Stig Fuglestad KGD Development AS, Oslo CEO engineer Roger Gale Professor Finn Drangsholt

OIL SHALE Oil Shale is a sedimentary rock that contains organic matter, which although not appreciable soluble in conventional petroleum solvents can be converted to soluble liquids by heating. When heated in a processes known as pyrolysis, destructive distillation or retorting, the bonds rupture forming smaller liquids or gaseous molecules. These can then be separated from the inorganic matrix, which remains behind as the spent shale waste products.

WORLD WIDE DEPOSITS Oil shale has been found on all of the inhabited continents. U.S. Geological Survey estimate that the world's oil shale deposits comprises 2 quadrillion barrels. If all this oil were extracted and distributed among the world's residents, each person would receive about 600.000 barrels. However, the spent shale would cover over the entire surface of the world, land areas and ocean included, to a depth of about 10 feet.

DIVERGENCE IN OIL SHALE Commercial grades of oil shale ranges from about 100 to 200 litres per metric ton (l/t) of rock. The U.S. Geological Survey has used a lower limit of about 40 l/t (9 gal/ton) for classification of Federal oil-shale lands. Here we will use the units used by U.S. Geological Survey – gallons / ton to define the oil shale types as shown below:

DIVERGENCE IN OIL SHALE

DIVERGENCE IN OIL SHALE

DIVERGENCE IN OIL SHALE

OIL SHALE DEPOSITS

OIL SHALE DEPOSITS

PROBLEMS CONNECTED TO EXISTING TECHNOLOGY High consumption of water Water polluted with small amount of oil, fines and chemicals High level of energy consumption – inefficient energy conversion High output of GHG emission Huge capital investments Heavy oil which must be upgraded or mixed with light oil prior to refining

THE TARBLASTER IDEA The idea in developing the Tarblaster technology was to present a technology which could extract the oil and upgrade it to a refinery feed stock without the environmental constraints as by existing technologies.

TARBLASTER GENERAL FLOW DIAGRAM

TARBLASTER LOGISTICS

THE BENEFITS OF THE TARBLASTER TECHNOLOGY Low energy consumption Self-sustained with energy by combustion of low value energy Reduced CO2 emission No water consumption Extraction and upgrading the oil in one operation Reduce capital investments Easy to scale up Increased value of oil by: Increased API FROM 8 to 25 (*) Reduce sulphur and metal content (*) Proved API 18, but believe it will be possible to reach API 25 by an add on process

TEST UNIT First test June 2008 Test rig ready for testing at SINTEF ENERGY RESEARCH AS, Trondheim

FROM OIL SHALE TO OIL

TARBLASTER TEST RESULTS 20.05.09 ESTONIAN OIL SHALE Test period 55 minutes Total oil sand feed 33,348 kg Mass of carbon in sand Oil evaporated off 4 % of mass of shale Oil collected 1,41 litres

COMPARISON PRESENT PRODUCTION AND TARBLASTER PRODUCTION

FEASIBILITY OF THE TARBLASTER TECHNOLOGY Unique low temperature and pressure thermo mechanical process Process equipment known to the industry Mining operation as for existing technology

CUSTOMERS BENEFIT FOR EXISTING INDUSTRY AS AN ADD ON PROCESS REDUCED CAPITAL INVESTMENT REDUCED ENVIRONMENTAL IMPACTS REDUCED LIABILITY RISKS SHORTER PAY BACK TIME LOWER RECOVERY COSTS AND HIGHER YIELD CAN HANDLE LEAN SHALE CAN USE FINE GRAINED SHALE NO WATER CONTAMINATION

PRIME POTENTIAL CLIENTS VG Oil AS, Estonia PETROBRAS, Brazil 27 companies pursuing oil shale in USA

Jørn Bakken SINTEF Energy Research AS THE TECHNOLOG CHALLENGES Jørn Bakken SINTEF Energy Research AS Process for the preparation of the feed to the reactor System for even distribution of the feed into the reactor Handling of spent shale with regeneration of the heat in a solid/liquid steam boiler Testing and development of a high temperature sand filter for capture of fines in the gas stream Optimization of the condensation conditions by different partial pressure of the gas fraction

Jørn Bakken SINTEF Energy Research AS THE TECHNOLOG CHALLENGES Jørn Bakken SINTEF Energy Research AS Optimization of the fluidization conditions in the reactor and regenerator by recirculation of hot pyrolysis gases into the regenerator's plenum Development of an electrostatic filter for capture of oil aerosols and non condensed fumes Mass and energy balance for optimization of process temperature and specific loads Improved upgrading by utilizing the kinetic energy in the gas stream and rerouting part of the produced oil to the reactor Simulation and characterization of the process