tarblaster market segmentation final report prepared for tarblaster a/s 10 th june 2009

TARBLASTER MARKET SEGMENTATION

Final Report

Prepared for Tarblaster A/S

10th June 2009

Introduction

OTM has been asked to carry out an initial market segmentation and verification exercise in

advance of the workshop, and also participate in this workshop as a presenter of this

information and as an independent participant

OTM market analyses generally have three levels of detail as follows:

Level 1 – Market segmentation and verification

Level 2 – Segment market demand and revenue analysis

Level 3 – Commercialization planning/ roadmapping

This work represents level 1 analysis and the accompanying slides review the 5 different

segments and verification of the market for each segment

3 Interviews were conducted in some of the segments to probe and validate some of the

conclusions of this report

2

3

Technology Preview Workshop held in Calgary on 21st January 2009

Attendees included AERI, AOSC, CNR , Oilsands Quest Inc/ CONRAD , Shell, Syncrude, Total Apologies - ARC, Imperial Oil, Petro-Canada, StatoilHydro, Uni of Alberta, Uni of Calgary

Site visit to Syncrude’s Mildred Lake mine, 20th January

Visit to test rig at SRC, Saskatoon, 22nd January

Petro-Canada visit, 23rd January

Perceived Strengths and Benefits No water requirement Smaller footprint and less remediation-requirement Possibility of lower CAPEX (but needs verification) Output quality improvement without hydrogen Progress already achieved (TRL 3-4) with preliminary testing

• Now need mass and energy balances and conclusions• Detailed process flow-diagram developed, pilot plant constructed and operational, some tests conducted

and pilot plant data available• Simplified process (upgrading API as well), relatively simple flowchart• Process positives - Hot oil and gas as heating medium in reactor, heat recovery from tailings, hot solids

recirculation, separate HC/ H2O condensation

Quality of upgraded product needs demonstrating Mobility – is desirable if achievable Modularisation - cost control, remote areas, brownfield ops, SAGD

Technology Preview, Calgary, Jan 09

4

1. Resolve challenges with feedstock conditioning - particle size effect and management

2. Analyse energy balances - how much energy used/ bbl processed in each part of the process,

how much CO2 produced

3. Review chemistry - C/H review, theoretical calcs and comparison with test results

4. Review pipeline-ability of upgraded oil

5. Experiment with reactor temperature and impact of % coke in sand

6. Carry out due diligence re competing/ similar technologies and what can be learnt from them

7. Improve hot sand recycling ratio - reduce ratio (3:1) and quantify impact on performance

8. Carry out cost/ benefit comparisons of simple versus complex process flowcharts

9. Carry out complex analysis of outputs

10. Review energy efficiency - especially spent sand output temperature (100 C)

11. Model fluidised bed

12. Assess erosion/ corrosion in pilot

13. Waste product – leeching of metals in rain etc?

14. Analyse residual HC build-up in reactor

Workshop Suggestions for Action Plan

1. Oil sands refining

2. Drill cuttings disposal (Onshore and Offshore)

3. Algae refining

4. Oil shale refining

5. Land reclamation

5

Segments investigated

Topics investigated for each segment

Market Drivers

Geography

Value Chain

Competing Technologies

Summary

6

1.Oil sands refining

7

Oil sands refining: Market Drivers

8

Drivers Examples

Depleting conventional oil Roadmap by U.S. DOE to develop oil sands in America

Anticipated demand from developing countries Petroleum demand in Asia to increase by 40% (2015)

Environmental challenge Most governments have policies to reduce GHG emissions (Kyoto protocol)

Preservation of fresh water • Push to reduce fresh water usage (Canada)• Lack of availability of fresh water in Middle East• Lack of water in remote areas

Energy Intensive process Extraction process requires steam generated from natural gas – prone to price and availability fluctuations

Oil sands refining: Geography & Clients

9

2390 bbl

2260bbl

430bbl

347bbl

46bbl

17bbl

10.5bbl

4.46bbl

0.0015bbl

Canada – Global technology leader.• Suncor, Syncrude, Petro-

Canada, Shell, ExxonMobil• Husky, EnCana, Talisman,

Statoil Hydro, TotalUnited States – renewed interest by

the government to develop bitumen deposits

• Shell. Chevron, Murphy, Marathon, ConocoPhillips

Mexico – traditionally the major supplier of heavy oil to US. Assets decreasing.

• PEMEX

Brazil – offshore heavy oil (not a market for Tarblaster)

Venezuela – large scale implementation of upgrading technologies

• PDVSA, StatoilHydroEcuador – heavy oil under

environmentally sensitive area (UN Biosphere reserve site)

Kuwait – Keen to ramp-up production. Steam Injection is preferred. Lack of freshwater

• KOCCongo, Madagascar – smaller capacities needed, lack

of fresh water• Total, Eni

Egypt , Nigeria and Angola– Large bitumen onshore deposits. No plans to develop yet

• Total

North Sea – Offshore heavy oil. Grane (Norway)- not a market for Tarblaster

Russia – Current focus light oil. Major heavy oil projects expected in coming years (Tatarstan and Timon-Peshora basin)

Oil sands refining: Value Chain (Mining & in-situ)

10

1 Extraction Bitumen

API ~8

RefineryMining

Diluents

Dilbit / Synbit

API ~ 24

3 Bitumen RefineryIn-Situ

Diluents

Dilbit / Synbit

4Partial Upgrading

Bitumen RefineryIn-Situ SCO**

API ~25

2 Extraction SCO

API ~34

RefineryMining Upgrading

Full UpgradingBitumen RefineryIn-Situ5

ValueCreatedCost

Extraction(Mining)

Partial Upgrading

Full Upgrading(Mining and In-situ)

*SCO – Synthetic Crude oil; **SCO – partially upgraded

(Non – Integrated)

Integrated

(Non – Integrated)

Partial Upgrading

Full Upgrading

High Medium

Low

Tarblaster’s Market

2

4

5

SUBJECTIVEASSESSMENT

Oil sands refining: Competing Technologies

11

Chattanooga group

Hydro-Retorting

Technology Maturity

Basic Research Lab Testing Applied Research andDemonstration

Commercial

BITMINCounter current

desander process

Selective Separations

TARblaster technologyExtraction and upgrading in

one step

Hydrotransport

Zero fine tailing extraction process(ZEFTE)

Clark hot water extraction process

Caustic Process

Alberta Taciuk Process

Implemented by SUNCOR

Oslo cold water extraction

process (OSLO CWE)

Implemented by Syncrude

Oslo hot water extraction

process (OSLO HWE)

HIVEX

Targeting oil sands in UTAH

Oil sands refining: Competitor Analysis

12

Tarblaster

Alberta Taciuk Process

OSLO cold water extraction

OSLO hot water extraction

HIVEX + CPJProcess

ZEFTE

CompetingTechnology

Scalability BitumenRecovery

Simultaneousupgrading

TailingsFootprint

BITMIN

* Based on point source emissions only not lifecycle

Best

Medium

Worst

CLARK HWE


13

HighLow

High

Industry NeedWhat capabilities the oil sands

industry is looking for

Low

Cap

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5

Development of small scale <30,000 bpdIn-situ projects

1

Reduced CAPEX for large scale mining projects2

Reduced energy requirements for mining projects3

Reduced water requirements for mining projects4

Development of new in-situ technologies5

Reduced GHG emissions 6

Reduced diluent requirements7

Development of new mining technologies 8

1

6

78

Development of small scale mining projects 9

9

Bubble size indicate size of the prize


Oil sands refining: Summary

14

Oil sands refining: Summary

The demand for extraction and upgrading technology is uncertain in the current climate –

most new projects need crude-oil prices of around $70 a barrel to turn a profit

Near term growth for Tarblaster technology may not come from North America because most

of these projects are large and have already committed to infrastructure

For large scale mining projects (> 150K bpd), Tarblaster has advantages (lower GHG footprint,

lower requirement of energy, lower capital intensity and scalability)

Oil sand reserves in Madagascar, Congo and Egypt, where fresh water availability is a

problem and projects are expected to be small scale may offer niche growth opportunity

Tarblaster is ideally suited for smaller scale mining operations because of its scalability,

avoiding infrastructure costs required in full upgrading (such as sulfur and nitrogen handling

facilities) to produce a higher value product

Alberta Taciuk Process (ATP) and Wesco Energy Corporation (HIVEX + CPJ process) will be

the main competitors. Wesco Energy Corporation in particular is working actively to develop

small scale oil sands mining projects in UTAH

2.Drill cuttings disposal (onshore and

offshore)

15

Drill cuttings disposal: Market Drivers

16

Drivers Examples

Stringent environmental / ecological regulations • Ecological dangers, land pollution• US EPA regulations on drilling waste discharge• OSPAR regulations in the EU

Economic Incentives • Cost of disposal is high (energy, maintenance, labour, equipment, transportation)

• Maximizing oil recovery from cuttings• Recycling drilling fluids

Operational issues • Process bottleneck: Weather uncertainty – waiting on weather and availability of ships to transport

• Skip footprint on expensive rigs

Need for Innovation • Portability of unit(s)

Health & Safety • Human health issues/chemical exposure

Drill cuttings disposal: Geography & Clients

17

• Azerbaijan – No standards for these have been set• China - Government encouraging the use of low toxicity

fluid• Netherlands – Under OSPAR 2002/3 cuttings

contaminated with synthetic fluids may only be discharged in exceptional circumstances

• Russia (Sakhalin Island) - Not yet discussed with regulators

• Canada – (2002 draft guidelines allow cuttings to be discharged if treated prior to discharge – provided that reinjection is not economically or technically feasible. Target oil on cuttings retention limit of 6.9% wet weight

• United States – Discharges not allowed. Alaska: Discharges allowed except for coastal Cook inlet, subject to restrictions.

• Brazil – Discharge approved on a case-by- case basis by IBAMA

• Trinidad - No specific restrictions against offshore discharge and has historically been allowed.

• Angola – Cuttings discharge allowed• Bahrain – Not addressed• Congo – No specific requirements• Equatorial Guinea – Discharge allowed• Gabon – No specific requirements• Iran – Not addressed• Kuwait – Not addressed• Malaysia – Discharge allowed• Nigeria - Cuttings limited to 5% drilling fluid or

less for discharge (except for esters)• Oman – Not addressed• Qatar – Not addressed• Saudi Arabia – Not addressed• Thailand – No specific restrictions• UAE – Not addressed• Vietnam – No stipulations

• Australia – Cuttings discharge assessed on case-by-case basis

Oil companies under pressure to conform to regulatory requirements , such as in Gulf of Mexico, North Sea, and Australia. Opportunity for new technologies to facilitate achieving regulatory requirements and reducing cost

Oil companies under pressure to conform to regulatory requirements , such as in Gulf of Mexico, North Sea, and Australia. Opportunity for new technologies to facilitate achieving regulatory requirements and reducing cost

• Denmark – Considered on a case-by-case basis• Netherlands – Under OSPAR 2002/3 cuttings

contaminated with synthetic fluids may only be discharged in exceptional circumstances

• Norway – OSPAR decision 2002/3 permits Group III cuttings discharge only under exceptional circumstances. Applications for approval require testing according to OSPAR format

• United Kingdom – Although OSPAR 2002/3 decision permits Group III cuttings discharge only under exceptional circumstances, the UK government has made it clear that there will be no exceptional circumstances arising that would lead to discharge of SBM cuttings

Drill cuttings disposal: Value Chain

18

Untreated Landfill

Treated Landfill

Onshore Landfarm

OnshoreInjection

IncinerationTreatment

Cost(incremental cost / well)

Onshore ThermalTreatment

OffshoreInjection

OffshoreThermal Treatment

Drillcuttings

Value Created

Cost Parameter Value Units

Thermal Treatment (UK) 251 $/t

Treated Landfill (UK, Norway , USA ) 208 $/t

Onshore Injection ( UK, USA) 130 $/t

Incineration Treatment (UK) 111 $/t

Landfarm (UK) 37 $/t

Untreated Landfill (UK) 74 $/t

Drill cuttings disposal: Competing Technologies

19

Technology Maturity


Commercial

Onshore Disposal Methods

•Landfills, Landfarm, Injection, Thermal treatment

Offshore Injection

Offshore Thermal treatment (TWMA –

Rotomill method)

Microwave technology(Global Resources

Corporation)

TARblaster technology

MI Swaco Thermal treatment

technology

Drill cuttings disposal: Competitor Analysis

20

Tarblaster

Onshore thermaltreatment

Offshore thermal treatment

Cutting re-injection

Microwave technology-GBRC

MI Swaco thermal technology

CompetingTechnology

Current market Share (WBM & SBM)

Potential future liability cost

Power requirements


*Gulf of Mexico

*WBM- water based mud; OBM / SBM – Oil / Synthetic based mud

21

HighLow

High

Industry NeedWhat capabilities the drill cuttings

management industry is looking for

Low

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4

3

5 Development of offshore treatment of cuttings1

Development of onshore treatment technology2

Reduce groundwater and surface Impacts for current technology– Onshore

3

Reduction in air emissions from thermal treatment4

Portability of onshore treatment equipments5

1



Drill cuttings disposal: Summary

22

Drill cutting disposal: Summary

The demand to meet the energy Industry’s increasing need to comply with strict

environmental regulations will drive the growth in this sector. Both North Sea and Gulf of

Mexico are strictly monitored for ecological and environmental footprint and may be the

near term market for Tarblaster

Onshore treatment of drill cuttings is most suited for Tarblaster’s technology

Offshore treatment of drill cuttings offers excellent opportunity for growth. However, it is

unclear whether Tarblaster’s technology is suited for this (particular concern with regards to

meeting HS&E regulations)

TWMA – Rotomill is the only company that processes drill cuttings offshore and will be the main

competition. It has recently won major contracts from Shell & BP worth £ 10 Million

Tarblaster is ideally suited for onshore treatment of drill cuttings, where its low energy

requirement, portability and no ground water usage will be advantageous. However, there are

many companies working in this space and ‘Thermal Treatment’ of drill cuttings will be the

main competition due to its small size, excellent recovery and rapidity of the process

3.Algae refining

23

Algae refining: Market Drivers

24

Drivers Examples

Political • EU has biofuel target of 5.75% (2010); 10% (2020)• America, energy mandate for renewable; 25% (2025).

Growing interest by end users • Big push by automotive industry to use clean technology

• Pratt & Whitney, Air France-KLM, Airbus, Boeing interested in Jet fuel from Algae (investing heavily)

Oil company diversification • Chevron & Shell investing actively in algae refining technologies

Non competition with food • Higher yield for acetate compared with traditional biofuel feedstocks (corn, soyabean, oil palm)

• Algae can be grown on marginal land• Doesn’t compete with food crops

First mover advantage • Algae production is still a challenge• Industry offers excellent advantage to partner with

Algae production companies

Utilize large waste CO2 resources • Coal fired plants – Algae consumes CO2 producing O2.

Explosion ion biotechnology • Advances in metabolic engineering and systems biology

USA• Chevron –NREL alliance

(algal oil to transportation fuel)

• Shell – Pilot facility under construction in Hawaii

• ConocoPhillips - $5 million in research

• Boeing: algae expected to be primary feedstock for aviation biofuels within 10-15 years.

• Other players: Livefuels, Petrosun, Solix, Greenfuel Tech, Petroalgae, Valcent)

Algae refining: Geography and clients

25

New Zealand• Aquaflow Bio

Netherlands• Air France-KLM: agreement

with Algae-Link to procure algae oil to be blended with conventional jet fuel. Algae-Link

UK• SeagreenFrance• Shamask • FermentalgGermany• NovagreenSpain• Biofuel SystemsItaly• ENI - for GHG Abatement

IsraelSeambiotic

Canada• Pratt &Whitney:

Investigating biofuels from algae

Over the past three years US$240 Million of VC funding and other investment support has gone into start-up companies attempting to commercialize algae-to-energy products

Algae refining: Value Chain

26

PhotobioreactorRefineAlgae

Biomass

Open Ponds

Extraction Algae Oil

Harvest

Algal paste

Biocrude after Pyrolysis

Algal oil and dilapidated algal cake

Algal oil and Ethanol

Biodiesel and jet Fuel

Algae Oil & Animal Feed and Ethanol Solid Fuel

NutrientsSunlight

CO2

1 Metric Ton *

* Calculation based on 1 metric Ton of CO2

~540 kg

Dry equivalent

(20% to 40% oil)

~54 kg oil

200 kg ground water

61 kg Nitrogen

Today there is no single process established for cost effective harvesting, oil extraction and refining.

This is an area of active research and significant part of the IP claimed by many companies in the space

Recent research concludes that per barrel oil prices could range from US$84 to US$50

Algae refining: Competing Technologies

27

Technology Maturity


Commercial

Aurora Biofuels (USA)•Algae to biodiesel

Petrosun (U.S.)

1,100 acre farm:•Potentially 4.4 million gallons of Algae oil •11 million pounds of biomass

Enhanced Biotechs and Technologies (UK)•CO2 Abatement

Infinifuel Biodiesel (USA)•Algae to Biodielsel

Solix Biofuels ( USA)•Algae to biodiesel•Recently raised US$ 5 million to build a pilot plant in Colorado

Algaelink (Netherland)

•Algae to Jet Fuel

PetroAlgae(USA)•Algae to transportation fuel and heating oil

Origin Oil (USA)•Algae to fuel

HR BioPetroleum (USA) •Shell JV•Algae to Ethanol and solid fuel

Solazyme (USA)•Partner with Chevron (only company to have produced certified biodiesel from algae•Algae to biodiesel, nutraceuticals, cosmetics and other speciality chemicals

Sapphire Energy (USA)

•Algae to gasoline•Leader in start-up investment (+ US$100 million)

Tarblaster technology

Algae refining: Competitor Analysis

28

Tarblaster

HR Biopetroleum

Petrosun

Sapphire Energy

GreenFuel Tech.

OriginOil

CompetingTechnology

End Product Value

Combination Farming -

processing

Commercialization strength

Best

Medium

Worst


29

HighLow

High

Industry NeedWhat capabilities the algae refining


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3

Commercial l harvesting of algae1

2 Development of commercial extraction technology

3 Reduce dewatering requirements prior to extraction

4 Reduce separation /treatment chemicals

1




Algae refining: Summary

30

Algae Refining: Summary

Research to produce oil from algae – potential to yield 30 times more energy per acre than

crops such as soybean – to produce diesel, gasoline, jet fuel and solvents is actively being

pursued

Near term growth for Tarblaster technology may come from North America, where most R&D

into producing algae strains for oil is focussed at the moment

Currently the industry is focussing on growing suitable strains of algae, maximizing algae

yield whilst minimizing production costs (and not so much on the extraction to oil)

It is hard to predict the suitability of Tarblaster technology for this segment as there is lack of

data for the peer group. Although there is uncertainty, Tarblaster’s growth strategy could

focus on forging strong partnerships with algae producers

Some companies have started to develop technologies for extraction of oil from algae, such

as OriginOil, PetroSun Inc., Greenstar Products Inc. However, most of these companies are

in early-development stage and years away from generating revenues

4.Oil shale refining

31

Oil shale refining: Market Drivers

32

Drivers Examples

Declining conventional production and increasing demand

• ~2.8 trillion bbl of Oil shale resources• Successful exploitation will result in 400 years of

additional oil at current consumption

Government funding • Government funding for leasing and technology R&D

Water Intensive • Present technologies unable to prevent leaching and protect ground water

GHG Emissions • Extracting hydrocarbons from oil shale produces carbon dioxide, which must be captured, used, or stored

Energy Intensive • Most technologies require so much energy to extract the oil that the amount of energy expended is greater than the energy produced

Poor recovery • Existing technology can convert 15% shale into oil• 40% of the energy recovered is consumed in the

process• Approximately 6% of shale is converted at the end of

the process

Oil shale refining: Geography and clients

33

USA• Largest reserves• Pilot plants only• Chevron; ExxonMobil,

Anadarko, Shell,• Syntec Inc, Natural Soda Inc,

millennium synthetic fuels Australia• Pilot plants only• Queensland Energy Resources Ltd

Brazil• 1 Operational plant –

Petrobras

China• China projected

to be the largest producer

• 1 Operational Plant -Fushun Mining Group

Russia• Keen to develop

shale• One plant in

collaboration with Estonia (currently in standby)

Estonia• Richest deposits in the

world• Active shale industry• 95% electric power from

shale• 3 operational plants• Companies: Eesti Energia,

VKG Oil, Keviali

Canada• Looking into

developing

Africa• No plans yetUSA: 6,000 Bbbl

Brazil: 300Russia: 247Congo: 40Estonia: 16Australia: 15Canada: 15Europe: 15China: 10Rest 5

Only 5 operational plants in the world (5,000 bpd):Estonia – 3 Eesti Energia, VKG Oil and KevialiChina – FushunBrazil – Petrobras

Oil shale refining: Value Chain

34

Mining and crushing

RefinerySurfaceMining

Surfaceretorting

facility

Mining (under ground)Underground

mining

Shale Fragments (Kerogen)

Synthetic crude oil[$47/bbl]

Shale

oil

Upgrading

[$57/bbl] Refinery

Surfaceretorting

facility

Kerogen Synthetic crude oil

Shale

oilUpgrading

Pre refining costs*

MiningModified insitu

[$62/bbl]In situ

retortingKerogen

In-situTrue insitu[$38/bbl] upgradingShale oil RefinerySynthetic

crude oil

* Estimates, US Department of Energy (2004)

1

2

3

4

RefinerySynthetic crude oil

Shale

oilUpgrading

ValueCreatedCost

Mining

OrePreparation

Retorting

Upgrading

Mining ValueCreatedCost

In-Situ

Steam Generation

Upgrading

In-situ

Oil shale refining: Competitors(Retorting Technologies)

35

Technology Maturity

Basic Research Testing Pilot Plant andDemonstration

Commercial

Modified In-Situ

True In-Situ

EGL Process (USA)

Fuel Cell Process (USA)

IGE Process (USA)

ExxonMobil Electrofac Process (USA)

Chevron CRUSH Process (USA)

Shell ICP Process (USA)

Internal Combustion

Paraho Process (USA, AUS)

Conduction Through Wall (In-

situ)

OilTech Process (USA)

Fushun Process (CHINA)

Kiviter Process (ESTONIA)

Adaption of Gas combustion

process(mined)

Hot Recycled Solids (mined)

Petrosix Process (Brazil)

Galoter Process (Estonia)


Microwave technology

Global Resource Corporation (USA)

Jordon and Australia (stuart

Shale project) are implementing this

technology

AOSTRA-Taciuk Process(CANADA)

Oil shale Refining: Competitor Analysis

36

Tarblaster

Kiviter /Galoter Process

ATP (Alberta)

CompetingTechnology

Operational production

capacity (tons) Energy

Requirement Yield QualityEnvironmental

impact

Best

Medium

Worst


Petrosix Process

Fuschun Process

In-Situ ProcessesE.g. Shell ICP*

* Assumption: If the technology reaches commercialization

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HighLow

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Industry NeedWhat capabilities the oil shale


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3 5

1 Reduced CAPEX / OPEX for mining

2

3 Reduced water requirements

4 Development of new in-situ technologies

5 Reduced GHG emissions

61

6



Technology demonstration at commercial scale – producing 50,000 bpd (surface)

Improved spent shale management


Oil shale refining: Summary

38

Oil shale refining: Summary

Department of Energy, USA predicts commercial production of oil from shale in 2030

Oil shale is a very large resource of energy. However, Oil shale lacks the lower boiling-range

hydrocarbons that make up natural gasoline, and the heavier hydrocarbons that refineries

crack to make gasoline. It does yield hydrocarbons in the middle-distillate fuels boiling range

— naphtha, kerosene, jet fuel, and diesel fuel

Inspite of this vast resource there are only 5 operational plants in the world (Estonia, Brazil

and China). The high recovery cost (Mining process can cost ~ $50 to $60 / bbl) is holding the

industry back. The true in-situ –Shell‘s ICP process (Mahogany Project) –is still in early-

development stage

Galoter (to be implemented in Jordon); Petrosix process (Jordon and China); ATP (China and

Australia) have significant lead compared with Tarblaster. However, if the Tarblaster process

can transform the kerogens to soluble oil and upgrade it in one operation then it would be a

disruptive technology

5.Land Reclamation

39

Land Reclamation: Market Drivers

40

Drivers Examples

Political • Legal frame work, legislation and regulations for Contaminated Land Remediation (CLR):

• N. America, W. Europe - in place• Asia, Africa, E. Europe. S. America – limited

• Corporate responsibility, public demand

Economical • Real estate (brownfield site development incentives)• Landfill tax exemption policies• Losses caused by contamination• Fines imposed by authorities• Increasing cost to landfill contaminated material

Environmental • Cross contamination• Consequential crop yield degradation• Secondary land erosion

Implementation barriers • Progress hampered by ambiguous legislation/regulations• Uncertainty over waste status/classification (waste definition)• Regulators/end-users confidence in new technologies

Land Reclamation: Potential Market

41

Soil Contamination Common Causes Contaminants

Rupture of underground storage tanks Fuels, Solvents, Industrial chemicals

Application of pesticides Pesticides

Percolation of contaminated surface water to subsurface strata

Effluents, heavy metals, pesticides

Land farming Drill cuttings, effluents

Leaching of waste from landfills Wastewater

Direct discharge of industrial waste Textile waste, Wastewater

Oil & Gas operations Oil spillage (blowout), drilling fluid, Refinery waste

Mining operations Mining waste and slurry dams

Established Markets

Potential Markets

Future Markets

Land Reclamation:Geography

42

UKTI strategy outlook (08/09):

CHINA• Considered most

serious contamination situation.

• Little or no legislation in place.

• Over 123,000 km2 or one-tenth of cultivatable land contaminated

• Estimated annual grain loss (heavy metals): US$ 2.6 bn

USA• Leader in remediation

execution.• Full legislation and regulations

in place.• Over 200,000 Contaminated

Land Remediation (CLR) sites identified

BRAZIL• Little legislation in place.• Over 15,000 CLR sites

identified• Companies (local and foreign)

looking for new solutions to comply with local legislation

UK• Full legislation and

regulations in place.• Estimated market size

(2007) £1 bn• Over 228 companies

actively involved in land remediation industry

CANADA• All mining companies

must remediate land after activities in Alberta

• As of 2005: 42,000 hectares of land disturbed by oil sands mining, $356 million held by Alberta Gov. as security to ensure reclamation obligations met.

VENEZUELA• Little legislation in place.• Over 7,000 oil pits, providing a

significant market

Land Reclamation: Value Chain

43

Excavation (Dig and Dump)

Ex-situTechnology

In-situTechnology

Bioremediation

Vapour extraction system (excavated

soil bank)

Thermal desorption plant (rotary kiln)

Soil washing

Contaminated site

Cover and barrier

Bioremediation

Vapour extraction system (sparging

and slurping)

Electrical resistance heating

Chemical oxidation (introduce reactive

materials)

Contaminated site

Cost Cost

Primary remediation technique:Dig and Dump reportedly forms more than half of the land remediation market

Land Reclamation: Competing Technologies

44

Technology Maturity


Commercial

Ex-situ dig and dump

•High degree of confidence•Very rapid but expensive

Bioremediation•Used for: Petroleum Hydrocarbons and coal tar contaminated sites

Vapour extraction•Atmospheric losses a concern.•Used for petroleum hydrocarbon contaminations

Thermal desorption

•Very effective• Remediated soil needs further processing

Soil washing•High degree of confidence•Post treatment required

Cover and barrier

•Expensive •Requires long term monitoring

Bioremediation•Minimal site disturbance•Used for: Petroleum Hydrocarbons and coal tar contaminated sites

Vapour extraction•Most common in Europe•Used for: volatile hydrocarbons, soil gas, ground water

Chemical oxidation

•Treatment of organic contaminants.

Electrical resistance

heating•Rapid but with high power requirements


Ex-situIn-situ

Land Reclamation: Competitor Analysis

45

Tarblaster

Vapour Extraction

Soil Washing

Thermal Desorption

Bioremediation

Chemical Oxidation

CompetingTechnology

Post-processing soil quality

Severe contamination

suitabilityEnergy Intensity

Electrical Resistance Heating

Dig and Dump


Cover and Barrier

Best

Medium

Worst

46

HighLow

High

Industry NeedWhat capabilities the land

reclamation industry is looking for

Low

Cap

abili

ty o

f T

arb

last

erA

reas

th

at a

lign

bes

t w

ith

Tar

bla

ster

2

4

35

Increased speed of treatment 1

High degree of confidence in In-Situ technologies 2

Reduced energy requirements 3

4

Land reclamation for onshore oil spillage 5

61

6 Bubble size indicate size of the prize


Land reclamation for mining projects such as tar sands projects

Mobile, easy deployable remediation infrastructure

Land Reclamation: Summary

47

Land Reclamation: Summary

European and US industries undergoing sustained development

Potential near-future market foreseen in developing countries

Numerous reclamation technologies exist which are well understood and have been

implemented at a commercial level for a large period of time

Technology selection for CLR is heavily influenced by reclamation costs versus project time

requirements

Industry has been affected by recession. Slow down on the uptake of smaller projects, larger

projects (Olympics) less affected.

Industry is focusing on developing/improving current technologies, with a less aggressive

approach to considering new technologies.

Most apparent barrier to entry is: confidence & proof of entry-level technology

Summary: Potential early opportunities for Tarblaster

48

High

Low

High

Ease of segment entrySegment is dynamic and open to new

entrants

Low

Co

mp

etit

ive

stre

ng

th o

f T

arb

last

erD

isti

nct

iven

ess

Post harvesting technology for Algae

Small scale (~30K bpd) oil sands mining projects

Example Congo, Egypt, Utah)

Onshore treatment of drill cuttings (compared with

thermal, incineration treatment technologies)

Land reclamation for mining projects such as tar

sands projects

Land reclamation for

onshore oil spillage

Cost-effective Kerogen to shale oil conversion



Ease of segment entry (what can be the early opportunities for Tarblaster)

–There is potential immediate industry need for Tarblaster’s technology

–The segment is looking for new technology

–The USP (distinctiveness) of Tarblaster can enable it to be a significant player in the near future

Oil sands refining

DOE office of petroleum reserves – strategic unconventional fuels. Fact sheet: Oil sands

OIL SANDS TECHNOLOGY ROADMAP: UNLOCKING THE POTENTIAL, 2004

Oil Sands Extraction Research Needs and Opportunities, M.G. Lipsett, Canadian Journal of Chemical

Engineering, August 2004 (volume 82)

Comparison between refinery processes for heavy oil upgrading: a future fuel demand, Int. J. Oil, Gas

and Coal Technology, Vol. 1, No. 3, 2008

Wesco Energy Corporation – Analyst Report

Bitumen and Very Heavy Crude Upgrading Technology, Flint L, 2004

A Review of Recent advances on Process Technologies for Upgrading Heavy Oils and Residua, Rana

M et al., 2006

Alberta oil Sands Industry Update, Alberta Employment , Immigration and Industry, 2007

Hydrocarbon Upgrading Demonstration Programme (HUDP), du Plessis D, 2007

Bitumen to finished products, Bruce GW, 2005

Athabasca Oil Sands Corp. Overview, James R, 2008

Upgrading Bitumen Derived Feedstocks – Choices and Opportunities, Bruce GW, 2008

49

References

Drill cuttings disposal

CAPP Offshore Drilling Waste Mgmt Review, 2001

Environmental aspects of the use and disposal of non aqueous drilling fluids associated with

offshore oil & gas operations, Report No. 342, May 2003

Oil and Gas Journal, Volume 102 Issue 18 May 10, 2004

Global Resource Corporation, Analyst Report

Data Summary of Offshore Drilling Waste Disposal Practices, Veil J, 1998

Offshore Drilling Waste Management Review, Canadian Association of Petroleum Producers,

2001

Environmental challenges provide new business oppurtunties, Barets Sea Conference,

TWMA, 2008

Integrated Drilling Waste Management ; TCC-RotoMill, TWMA, undated

Thermomechanical Desorption Process for Drilling Waste, Kjodes J, 2004

Interview with Mike Hodder – MI SWACO

50

References

Algae Refining

US Department of Energy’s Aquatic Species Program (ASP), 1998

Research report, “Biodiesel from Algae Oil”, 2007, MORA Associates

A Value Chain and Life-Cycle Assessment Approach to Identify Technological Innovation

Opportunities in Algae Biodiesel, Levine et. Al, (Undated)

Analyst reports – Beacon Equity Research 2008: OrigionOil, Sapphire Energy, HR Biopetroleum

Biodiesel from Microalgae, Chisti Y, 2007

Algal and Terrestrial Second-Generation Biofuels – Chevron and New Energy Equation, Bryan P et.

al., 2008

Shell Sustainability Report – Responsible Energy, 2007

Creating the Potential for Fuels from Algae – Sapphire Energy, Warner c, 2008

Strategic road to Commercialization – Food and Fuel from Algae, Sears, J, 2008

Opportunities and Challenges in Algae Biofuels Production, Benemann, J, 2008

The Algal Industry Survey, Edwards, M, 2009

Production of Microalgae for Energy Use, Posten C, Undated

Interview with Matt Bell, VP GEODynamics 51

References

Oil shale refining U.S. office of technology Assessment. “ An assessment of Oil Shale

Technologies”, 1980 Oil and Gas Journal, July 13, 2003 Oil and Gas Journal, Jan 26, 2009 Jordan's Commercial Oil Shale Exploitation Strategy – Part 1 US Oil Shale Market Potential 2007, Energy Business Reports, 2006 Profiles of Companies Investing Today to Secure America’s Energy Future, US

Department of Energy, 2007 World Oil Shale Retorting Technologies, Qain J and Wang J, 2006 Oil Shale Test Project – Research and Development, Shell, 2006 Strategic Significance of America’s Oil Shale Resource, Office of Naval

Petroleum and Oil Shale Resources, 2004 Focus on Australian Shale Oil, Smith S, undated Unlocking China’s Energy Potential, The Boston Consulting Group, 2006 America’s Strategic Unconventional Fuels Volume III, 2007 New Directions for Oil Shale: Pathways to Secure New Oil Supply Well Into

This Century, Schmidt S, 2003 52

References

Land Reclamation

The Land Remediation Industry, CL:AIRE, 2007 The Land Remediation Yearbook,– State of the Industry, EIC, 2008 Contaminated Land-Remediation Technologies, EIC, 2008 Global Opportunities for UK Companies in Remediation and Reclamation of Land,

EIC, 2008 Worldwide developments on land reclamation projects, Groothuizen B, undated Environmental Challenges and Progress in Canada’s Oil Sands, Canadian

Association of Petroleum Producers, 2008 Oil Sands Reclamation, Hanus S, 2004 Soil Vapor Extraction Implementation Experiences, Stamnes R and Blanchard J,

1997 Greenwich Peninsula – A major Contaminated Land Remediation Project,

Amsterdam N, undated In Situ Soil and Groundwater Decontamination using Electric Resistive Heating

Technology (Six-Phase Heating), CL:AIRE, 2008 The land Remediation Industry – Today and the Future, Randal J, 2007 Telephonic Interview (28/05/2009): Dr Robert Sweeney, Senior Project Manager,

CL:AIRE53

References

tarblaster market segmentation final report prepared for tarblaster a/s 10 th june 2009

Documents

initial market segmentation

segment market demand

imperial oil

reactor temperature

energy used bbl

segments investigatedtopics

different segments

technology preview workshop