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Unlocking Ten Trillion Barrels of Global Oil Shale Resources - The State of the Industry

Khosrow BiglarbigiINTEK, Incorporated

Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl 2

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Poll Question

What is your job title?

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Poll Question

Who is your employer?

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Poll Question

How many years of experience do you have?

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Poll Question

What geographic region are you from?

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Demand For Liquid Hydrocarbon Worldwide

Year

Mil

lio

n B

arre

ls P

er D

ay

Source: IEA 2012

30% Increase

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Global Liquid Hydrocarbon Supply

Source: IEA, 2012

Mil

lio

n B

arre

ls p

er D

ay

Year

NGL

Oil – Existing Fields

?Future DiscoveriesOil Sands

CTL GTL

EORShale Oil

Oil ShaleHeavy Oil

Bio Fuels

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What is Oil Shale?

RockKerogen

Pyrolysis

Upgrade

700 - 800°F

Syn- Crude Naphtha

Jet Fuel

Diesel

Nat. Gas

Hydrogen

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10 Trillion Barrels of Shale Oil Worldwide

United States

Zaire

Russia

Brazil

Italy

Morocco

Estonia

China

Canada

France

Egypt

Australia

IsraelJordan

Countries With Oil Shale Deposits

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Australia 32 Billion

MENA 153 Billion

Europe 120 Billion

Africa 100 Billion

Americas 6,100 Billion

Known Resources (Barrels)

Eurasia 270 Billion

Asia 27 Billion

Source: USGS, 2005* Jordan NRA, 2009

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America’s Oil ShaleMost Concentrated Hydrocarbon Deposit

2 Trillion Barrels

6 Trillion Barrels

Source: US DOE, 2004

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Substantial Areal Density

Source: Oil and Gas Journal, August 2004

1000

Bar

rels

Per

Acr

e Oil Shale

70 100

500

800

1,300

0

250

500

750

1,000

1,250

1,500

Alaska N.Slope Oil

Canada Oil Sands

WyomingUSA

UtahUSA

ColoradoUSA

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The Mahogany Zone

• The Most Prolific

• Up to 1000 Ft Thick

• Up to 75 Gal/Ton

Source: Redleaf Resources, 2008

15.24 Billion Barrels

Ontario 12.00

Manitoba- 1.25 Saskatchewan

Nova Scotia 1.70

New Brunswick 0.29

Source: USGS SIR-5294. 2005

Canada’s Known Oil Shale Resources

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

Source: USGS SIR-5294. 2005, USGS GSC 523, 1966, Cokorilo 2009, and Gulbay 2007.

Asia’s Known Oil Shale Resources

292 Billion Barrels

Russian Federation 248

China 16

Uzbekistan 8.4

Turkmenistan 7.7

Thailand 6.4

Kazakhstan 2.8

Myanmar/Burma 2.0

Armenia 0.3

Mongolia 0.3

Source: USGS SIR-5294. 2005, USGS GSC 523, 1966, Sawannathong 2007, and Nummedal 2009.

MENA’s Known Oil Shale Resources

155 Billion Barrels

Jordan 90.0

Morocco 53.0

Eqypt 5.7

Israel 4.0

Turkey 2.0

Source: USGS SIR-5294, 2005 and Verson 2006.

Southern Africa’s Known Oil Shale Resources

100 Billion Barrels

Congo 100

South Africa 0.1

Madagascar ---

Sources: USGS SIR-5294. 2005,Hunt 2007, and Catuneanu 2005

Australia’s Known Oil Shale Resources

32 Billion Barrels

Australia 31.7

New Zealand ---

Sources: USGS SIR-5294. 2005,Uranium, Oil & Gas Limited 2008, and Resmex Plc 2005

South America’s Known Oil Shale Resources

82.4 Billion Barrels

Brazil 82.0

Argentina 0.4

Chile ---

Sources: USGS SIR-5294. 2005

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Oil Shale Production ProcessesOil Shale Production Processes

Mining Retort UpgradingResource Refinery

Surface ProcessSurface Process

Drilling Heating UpgradingResource Refinery

In-Situ ProcessIn-Situ Process

Source: US DOE, 2004

Choke Point

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Shell In-Situ Conversion Process

Source: US DOE, 2008

High Value Products

Being Tested in JordanBeing Tested in Jordan

Light Surface Processing

HEATER

PRODUCER

OVERBURDEN

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Ecoshale In-Capsule Technology

Source: Redleaf Resources, 2008

HOT GAS

COOL GAS

Early Production System Test (Utah, USA)Early Production System Test (Utah, USA)

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Alberta Taciuk Processor (ATP)

PreheattubesVapour

tube

Combustionzone Retort

Preheattubes

Coolingzone

Oil shalefeed

750°C

500°C 250°C

Source: US DOE, 2006

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Gas Combustion / Heating Retort (GCR)

• Brazil (4,000 Bbl/d)

• China (4,000 Bbl/d)

• Estonia (6,000 Bbl/d)

• Australia (Project Scale Up)

Oil MistExtractors

Raw Shale

Spent Shale

RESIDUE COOLING

COMBUSTION

STRIPPING

PYROLYSIS

PREHEATINGMIST FORMATION

Oil MistExtractors

Raw Shale

Spent Shale

RESIDUE COOLING

COMBUSTION

STRIPPING

PYROLYSIS

PREHEATINGMIST FORMATION

RESIDUE COOLING

COMBUSTION

STRIPPING

PYROLYSIS

PREHEATINGMIST FORMATION

Source: US DOE, 2007

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Energy Return on Investment (EROI)

0

2

4

6

8

10

12

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 =Energyout - Energyin

Energyin

ER

OI

Oil Shale

Oil Sands

3

7

10

7

5

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“Oil shale is a local asset under global constraints.”

Klaus Brendow, Senior Advisor

World Energy Council

June 9, 2009

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Economic Price for Oil Shale Technology

Hybrid Surface Mining

Underground Mining

2007

Do

llar

s P

er B

bl

$60$62

$75Rate of Return – 15%

$0

$10

$20

$30

$40

$50

$60

$70

$50

Source: INTEK, Inc., 2014

$80

True In-Situ

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Oil Shale Project Costs

Item Unit Range**

Capital Cost $/BPD

O&M Cost $/Bbl 20 - 42

45K-65K*

* Barrel of Daily Capacity

Source: INTEK, Inc., 2009

** Does not include Hybrid Technology

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Oil Shale Environmental ImpactsAir Quality

Oil Shale Processing

HCGas CO2 SOx NOx

• CO2 Enhanced Oil Recovery• Sequestration• Other Industrial Uses

Capture and Clean Existing Technology

Process Plant Use

Source: SPE #110590, 2007

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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

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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

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Total Resource6 Trillion Barrels

High Quality Resource2 Trillion Barrels

Technical Recovery

1 Trillion Barrels

Reserves600 – 750Billion Bbls

The Prize (USA Example)

$50 - $65 / Bbl

@

Source: INTEK, Inc., 2008

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Reserves Potential Worldwide

200

400

600

800

1,000

1,200

1,400

$50 - $65 $75 - $90 $90 - $130

U.S. Worldwide

Oil Price ($/Bbl)

Bil

lio

n B

arre

ls

0

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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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