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Primary funding is provided by The SPE Foundation through member donations

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.

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Primary funding is provided by The SPE Foundation through member donations

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  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 www.spe.org/dl

  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 www.spe.org/dl 2

  3. Demand For Liquid Hydrocarbon Worldwide 120 100 80 24% Increase Million Barrels Per Day 25% Increase 60 40 20 2008 2011 2016 2021 2026 2030 Year Source: EIA, 2009

  4. Global Liquid Hydrocarbon Supply 120 100 NGL 80 CTL GTL ? Future Discoveries Oil Shale Million Barrels per Day 60 Oil Sands EOR Heavy Oil 40 Bio Fuels Oil – Existing Fields 20 0 1990 2010 2020 2030 2000 Year Source: IEA, 2008

  5. What is Oil Shale? Syn- Crude Naphtha Jet Fuel Diesel Gasoline Hydrogen Rock Kerogen 700 - 800 oF Pyrolysis Upgrade

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

  7. Known Resources (Barrels) Asia 27 Billion Australia 32 Billion 100 Billion Africa Europe 120 Billion MENA 153 Billion 270 Billion Eurasia Americas 6,100 Billion Source: USGS, 2005 * Jordan NRA, 2009

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

  9. Substantial Areal Density 1,500 1,300 Oil Shale 1,250 1,000 800 1000 Barrels Per Acre 750 500 500 250 100 70 0 Alaska N. Canada Oil Sands Wyoming USA Utah USA Colorado USA Slope Oil Source: Oil and Gas Journal, August 2004

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

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

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

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

  16. Oil shale Combustion Preheat Preheat Cooling zone tubes tubes feed Retort zone Vapour tube 500°C 250°C 750°C Alberta Taciuk Processor (ATP) Pilot Test (Utah, USA) 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) 12 Energyout - Energyin EROI = Oil Sands Energyin 10 8 EROI 6 10 Oil Shale 7 4 7 5 2 3 0 Oil Shale Oil Shale Oil Shale Oil Sands Oil Sands (In-Situ) (In-Situ, (Surface) (Surface) (In-Situ) Non.Elec.) Source: US DOE, 2007

  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 Unit Range * Capital Cost $/BPD 45K - 65K O&M Cost $/Bbl 15 - 25 * Barrel of Daily Capacity Source: INTEK, Inc., 2009

  21. Canadian Oil Sands Operating Costs $40 $35 $35 $30 $30 $23 $25 Dollar/ Barrel $20 $15 $10 $5 $0 2006 2007 2008 Year Source: Suncor, 2008

  22. 140000 $3 Billion $11 Billion 120 100,000 Bbl/D Project 100 80 60 40 20 0 Suncor - Albian Syncrude - Nexen – OPTI CNRL - Shell - PCA/UTS Fort Hills Millennium Aurora 2 & Horizon Muskeg & UE 1 Scotford 2001 2003 2006 2007 2008 2010 2011 Canadian Oil Sands Capital Costs $1,000 per Bbl of Daily Capacity Source: Canadian Association of Petroleum Producers, April 2008

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

  26. Process Plant Use • CO2 Enhanced Oil Recovery • Sequestration • Other Industrial Uses Capture and Clean Existing Technology HC Gas CO2 SOx NOx Oil ShaleProcessing • Air Quality Oil Shale Environmental Impacts Source: SPE #110590, 2007

  27. 2.5 MMBbl/d 52 Square Miles Green River (USA) 17,000 Square Miles 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 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. The Prize (USA Example) Total Resource 6 Trillion Barrels High Quality Resource 2 Trillion Barrels Technical Recovery 1 Trillion Barrels Reserves 600 – 750 Billion Bbls @ $50 - $65 / Bbl Source: INTEK, Inc., 2008

  30. Reserves Potential Worldwide 1,400 U.S. Worldwide 1,200 1,000 800 Billion Barrels 600 400 200 0 $50 - $65 $75 - $90 $90 - $130 Oil Price ($/Bbl)

  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

  32. Your Feedback is Important Enter your section in the DL Evaluation Contest by completing the evaluation form for this presentation or go online at: http://www.spe.org/events/dl/dl_evaluation_contest.php Society of Petroleum Engineers Distinguished Lecturer Program www.spe.org/dl

  33. Appendix

  34. Activities in Estonia VKG Oil Plant Balti Power Plant Eesti Power Plant Narva Oil Plant VKG Balti Narva Eesti Mining Area 425 Km2 34

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

  36. Cashflow of a Generic Oil Shale Project 1200 1000 800 Before Tax 600 Room for Government Action 400 200 Cum. Discounted Cashflow (MM$) 0 -200 After Tax -400 -600 -800 -1000 5 10 15 20 25 30 35 40 Year Source: INTEK, Inc., 2008

  37. Drilling Costs Mining Costs Upgrading Costs Tubular Steel Price Operating Costs Oil Shale Costs are ImpactedA Few Examples

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

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

  40. Projected Production Potential(Shale Oil in the U.S.) 2,500 Accelerated Scenario 2,000 RD&D Measured Scenario 1,500 Thousand Bbl/D Business as Usual Tax Incentives 1,000 500 Base 0 2005 2010 2015 2020 2025 2030 2035 Year Source: US DOE, 2007

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

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