1 Primary funding is provided by The SPE Foundation through member donations and a contribution from Offshore Europe The Society is grateful to those companies that allow their professionals to serve as lecturers Additional support provided by AIME Society of Petroleum Engineers Distinguished Lecturer Program

2 Unlocking Ten Trillion Barrels of Global Oil Shale Resources - The State of the Industry Khosrow Biglarbigi INTEK, Incorporated Society of Petroleum Engineers Distinguished Lecturer Program 2

3 Demand For Liquid Hydrocarbon Worldwide 24% Increase Year Million Barrels Per Day % Increase Source: EIA, 2009

4 Global Liquid Hydrocarbon Supply Source: IEA, 2008 Million Barrels per Day Oil – Existing Fields NGL Future Discoveries Oil Sands CTLGTL ? EOR Oil Shale Heavy Oil Bio Fuels Year

5 What is Oil Shale? Rock Kerogen Pyrolysis Upgrade o F Syn- Crude Naphtha Jet Fuel Diesel Gasoline Hydrogen

6 10 Trillion Barrels of Shale Oil Worldwide United States Zaire Russia Brazil Italy Morocco Estonia China Canada France Egypt Australia Israel Jordan Countries With Oil Shale Deposits

7 Australia32 Billion MENA 153 Billion Europe 120 Billion Africa 100 Billion Americas6,100 Billion Known Resources (Barrels) Eurasia 270 Billion Asia 27 Billion Source: USGS, 2005 * Jordan NRA, 2009

8 America’s Oil Shale Most Concentrated Hydrocarbon Deposit 2 Trillion Barrels 6 Trillion Barrels Source: US DOE, 2004

9 Substantial Areal Density Source: Oil and Gas Journal, August Barrels Per Acre Oil Shale , ,000 1,250 1,500 Alaska N. Slope Oil Canada Oil Sands Wyoming USA Utah USA Colorado USA

10 The Mahogany Zone The Most Prolific Up to 1000 Ft Thick Up to 75 Gal/Ton Source: Redleaf Resources, 2008

11 Europe’s Known Oil Shale Resources 120 Billion Barrels Italy 73.0 Estonia 16.0 France 7.0 Belarus 7.0 Sweden 6.0 UK 3.5 Germany 2.0 Luxembourg 0.7 Others 4.5

12 Oil Shale Production Processes Mining Retort Upgrading Resource Refinery Surface Process Drilling Heating Upgrading Resource Refinery In-Situ Process Source: US DOE, 2004 Choke Point

13 Shell In-Situ Conversion Process Source: US DOE, 2008 High Value Products Pilot Test (Colorado, USA) Light Surface Processing HEATER PRODUCER OVERBURDEN

14 Other Examples of In-Situ Technology Pilot Tests (Colorado, USA) Chevron Process Fractures Injector Producer Source: US DOE, 2008 AMSO Process

15 Ecoshale In-Capsule Technology Source: Redleaf Resources, 2008 HOT GAS COOL GAS Pilot Test (Utah, USA)

16 Alberta Taciuk Processor (ATP) Pilot Test (Utah, USA) Preheat tubes Vapour tube Combustion zone Retort Preheat tubes Cooling zone Oil shale feed 750°C 500°C250°C Source: US DOE, 2006

17 Gas Combustion Retort (GCR) Brazil (4,000 Bbl/d) China (4,000 Bbl/d) Estonia (6,000 Bbl/d) Australia (Project Scale Up) Source: US DOE, 2007

18 Energy Return on Investment (EROI) Oil Shale (Surface) Oil Sands (Surface) Oil Shale (In-Situ, Non.Elec.) Oil Sands (In-Situ) Oil Shale (In-Situ) Source: US DOE, 2007 EROI = Energy out - Energy in Energy in EROI Oil Shale Oil Sands

19 “Oil shale is a local asset under global constraints.” Klaus Brendow, Senior Advisor World Energy Council June 9, 2009

20 Oil Shale Project Costs Item UnitRange Capital Cost$/BPD O&M Cost$/Bbl K-65K * * Barrel of Daily Capacity Source: INTEK, Inc., 2009

21 Canadian Oil Sands Operating Costs Source: Suncor, 2008 $0 $5 $10 $15 $20 $25 $30 $35 $ $35 $30 $23 Dollar/ Barrel Year

22 Source: Canadian Association of Petroleum Producers, April 2008 $1,000 per Bbl of Daily Capacity Suncor - Millennium AlbianSyncrude - Aurora 2 & UE 1 Nexen – OPTI CNRL - Horizon Shell - Muskeg & Scotford PCA/UTS Fort Hills $3 Billion$11 Billion 100,000 Bbl/D Project Canadian Oil Sands Capital Costs

23 Shell CEO Says Higher Costs Limit Canadian Oil Sands Projects Oct 8, 2009

24 Total Canada Chief Says Oilsands Need Pricier Oil Oct 4, 2009

25 Economic Price for Oil Shale Technology True In-Situ Surface Mining Underground Mining 2007 Dollars Per Bbl In-Capsule $50 $60 $75 Rate of Return – 15% $0 $10 $20 $30 $40 $50 $60 $70 $35 Source: INTEK, Inc., 2008 $80

26 Oil Shale Environmental Impacts Air Quality Oil Shale Processing HC Gas CO 2 SO x NO x CO 2 Enhanced Oil Recovery Sequestration Other Industrial Uses Capture and Clean Existing Technology Process Plant Use Source: SPE #110590, 2007

27 Land Use Depends On The Process 1 MMBbl/D Production for 40 Years – Surface: 30 Square Miles – In-Situ: 15 Square Miles Example for 2.5 MMBbl/D Industry: – 52 Square Miles 2.5 MMBbl/d 52 Square Miles Green River (USA) 17,000 Square Miles Source: SPE #110590, 2007

28 Water Requirements 1-3 Barrels of Water per Barrel of Shale Oil Challenges: –Water rights –Water availability –Water runoff –Ground water protection Source: US DOE, 2007

29 Total Resource 6 Trillion Barrels High Quality Resource 2 Trillion Barrels Technical Recovery 1 Trillion Barrels Reserves 600 – 750 Billion Bbls The Prize (USA Example) $50 - $65 / Source: INTEK, Inc., 2008

30 Reserves Potential Worldwide ,000 1,200 1,400 $50 - $65$75 - $90$90 - $130 U.S. Worldwide Oil Price ($/Bbl) Billion Barrels 0

31 Summary Over 10 trillion barrels of in place resource Conversion technologies are advancing rapidly Estimated reserves of up to 1.3 trillion barrels worldwide Oil Price is a key driver for its development Requires concerted effort by the private sector, governments, and local communities

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33 Appendix

34 Activities in Estonia Balti Power Plant Eesti Power Plant Eesti Balti Mining Area 425 Km 2 Narva Oil Plant VKG Oil Plant VKG Narva

35 Breakdown of Economic Price for Generic Surface Project $60/Bbl Operating Costs 38% Risk Premium 9% Taxes 19% Cost of Capital 19% Transfer Payments 14% Source: INTEK, Inc., 2008

36 Cashflow of a Generic Oil Shale Project After Tax Before Tax Year Cum. Discounted Cashflow (MM$) Room for Government Action Source: INTEK, Inc., 2008

37 Oil Shale Costs are Impacted A Few Examples Drilling Costs Mining CostsUpgrading Costs Tubular Steel Price Operating Costs

38 Worldwide Oil Shale Activities USA Brazil Morocco China Australia RD&D 8 Pilot Tests 29 Companies Production 6,000 Bbl/D 2,430 Mw Production 4,000 Bbl/D Production 4,000 Bbl/D Exploration 12 Companies Jordan Commercial Scale-Up Source: INTEK, Inc., 2008 Estonia

39 Sources: World Oil Shale: Dyni 2003 Map: maps.google.com Middle East 38 Billion bbls South America 82 Billion bbls Africa 159 Billion bbls Australia 32 Billion bbls Europe 116 Billion bbls Eurasia 271 Billion bbls North America 6,015 Billion bbls Asia 27 Billion bbls 10 Trillion Barrels of Shale Oil Worldwide

,000 1,500 2,000 2, Year Thousand Bbl/D Projected Production Potential (Shale Oil in the U.S.) Base Tax Incentives RD&D Accelerated Scenario Measured Scenario Business as Usual Source: US DOE, 2007

41 Development Hurdles Access to Land –70% on Federal Land –No Commercial Leasing Program RD & D Environmental Permitting Fiscal Regime