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1
S P P C P M
02/05/02
S P P C P MSouthern Pacific Petroleum NL
Greenpeace vs the Future ofAustralian Oil Shale
02/05/02
Campbell AndersonChairman
Southern Pacific Petroleum NL
The 53rd Sydney Mining ClubSydney, Australia
2 May 2002
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The History of SPP and GladstoneThe History of SPP and GladstoneOil ShaleOil Shale
19681968 SPP and CPM founded by Sir Ian McFarlaneSPP and CPM founded by Sir Ian McFarlane
19731973 First oil price shock (US$2.90 to $11.65/bbl) - Yom Kippur WarFirst oil price shock (US$2.90 to $11.65/bbl) - Yom Kippur War
19741974 Discovery of Rundle depositDiscovery of Rundle deposit
1977/811977/81 Discovery of other Queensland oil shalesDiscovery of other Queensland oil shales
19791979 Second oil price shock (US$13 to $34/bbl) - Iranian RevolutionSecond oil price shock (US$13 to $34/bbl) - Iranian Revolution
19801980 Exxon secures 60% of Colony Oil Shale Project in ColoradoExxon secures 60% of Colony Oil Shale Project in Colorado
19801980 Exxon secures 50% of Rundle Joint Venture in AustraliaExxon secures 50% of Rundle Joint Venture in Australia
19821982 Exxon terminates Colony ProjectExxon terminates Colony Project
19841984 Exxon completes Rundle commerciality study (fluidised bed technology)Exxon completes Rundle commerciality study (fluidised bed technology)
19851985 Third oil price shock (US$31.75 to $10/bbl)Third oil price shock (US$31.75 to $10/bbl)
19851985 Exxon pays SPP A$44.5 million to restructure Rundle ProjectExxon pays SPP A$44.5 million to restructure Rundle Project
19861986 SPP selects ATP technology for testingSPP selects ATP technology for testing
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The History of SPP and GladstoneThe History of SPP and GladstoneOil Shale (cont.)Oil Shale (cont.)
19901990 Stuart Stage 1 Project designedStuart Stage 1 Project designed
19911991 Federal Government provides excise rebate supportFederal Government provides excise rebate support
19951995 Suncor secures 50% of Stuart Joint VentureSuncor secures 50% of Stuart Joint Venture
19971997 Stuart Stage 1 construction start by BechtelStuart Stage 1 construction start by Bechtel
19991999 Construction completedConstruction completed
19991999 Suncor takes over commissioningSuncor takes over commissioning
19991999 Odour emissions identifiedOdour emissions identified
20002000 Odour emissions assessed and reducedOdour emissions assessed and reduced
20012001 Suncor exits Stuart and SPP takes over operatorshipSuncor exits Stuart and SPP takes over operatorship
20012001 Production ramp-up beginsProduction ramp-up begins
20022002 ATP technology proven in Stage 1ATP technology proven in Stage 1
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Australia’s World Scale Oil ShaleAustralia’s World Scale Oil ShaleResourcesResources
Map AreaMap Area
Australia• Brisbane
• Sydney
• Gladstone
0 90 miles
Condor
Duaringa
Yaamba
Rundle
Lowmead
NagoorinNagoorin South
Stuart
Bowen
Mackay
Rockhampton
Gladstone
Proserpine
Boundary FlatLagoons
Block Creek
Rundle
Stuart
Duaringa
Condor
Yaamba Group
Nagoorin
Lowmead
Nagoorin South
2.6
2.6
2.5
4.8
4.0
2.4
0.7
0.4
50%
100%
100%
100%
100%
50%
50%
100%
TOTAL20.2
billion bbls17.3
billion bbls
* Based on a cutoff grade of 50 L/t at zero % moisture.Excludes 9.8 billion barrels (gross and net) of other oil shale in-situ atdepths below 500 meters and at high waste-to-ore ratios.
SPPNet Interest
Oil ShaleResource*
Deposit DiscoveryYear
1974
1977
1978
1979
1979
1980
1980
1981
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Stuart Schematic X-SectionStuart Schematic X-Section
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Stuart Stage 1 Process FlowStuart Stage 1 Process Flow
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Stuart Showcasing BreakthroughStuart Showcasing BreakthroughATP TechnologyATP Technology
Engineering: Bechtel (US), Krupp Polysius (Germany), UMATAC (Canada)Fabrication: Santaz-Censa (Spain)
Stuart Stage 1 ATP DesignStuart Stage 1 ATP Design
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Stuart Phased Development StrategyStuart Phased Development Strategy
380,000380,000
200,000200,000
2009 - 20122009 - 2012
8080
7575
1980’s1980’s
6,0006,000
4,5004,500
19991999
23,50023,500
15,50015,500
20062006
Oil Shale (tpsd)Oil Shale (tpsd)
Oil Products (bpsd)Oil Products (bpsd)
TimingTiming
R&D andATP Pilot
First Phase(Stage 2) Larger Phases
DemonstrationModule
Commercial Development
ATPScale-Up
75X 4X Replicate/Integrate
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0
100
200
300
400
500
600
700
Source: ABARE Research Report November 2001
Without Oil Shale
AustraliaOil Shale
With Oil Shale
kb/dkb/d
Oil Shale Could Reverse Australia’sOil Shale Could Reverse Australia’sGrowing Oil Supply DeficitGrowing Oil Supply Deficit
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Net Oil Imports
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Proven Analogy is Oil SandsProven Analogy is Oil Sands
NotesNotes:: 1. 1981-1993: London Financial Times, January 6, 1993.1. 1981-1993: London Financial Times, January 6, 1993. 1994-2001: Average of published costs by Syncrude and Suncor. 1994-2001: Average of published costs by Syncrude and Suncor.2. Company public reports year 2001 2. Company public reports year 2001
Production2
Suncor
Syncrude
Shell
Koch
0
100
200
300
400
500
600
700
800
900
1000 kb/d
19851980 1990 1995 2000 2005 2010
Actual
Projected Oil Shale Production
Suncor
Syncrude
US$/bbl ($’99)
1980 1985 1990 1995 2000
3
5050
4040
3030
2020
1010
55
44
66778899
Cash Opex1
Projected Oil Shale Cost
Actual
2005
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A$340M Stuart DemonstrationA$340M Stuart DemonstrationModule OperationalModule Operational
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0
1200
1400
k bbls
1000
800
400
200
k bbls
0
100
200
50
150
Stage 1 ProductionStage 1 Production
7767
Jun’01 Sep’01 Dec’01 2001 2002
233
650
Actual Estimate
88
Actual
Estimate Range (function of 2002 upgrade capex)
1200
1400
600
1600
2003Mar’02
110
Quarterly Annual
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85% Odour Reduction85% Odour Reduction
0
25
50
75
100
125
150
175
200
May Jun Aug Dec Apr/May Jun Sept
20002000 20012001
Stuart - Average OdourEmission Concentrations
225 k odour units/m3 at main stack
Nov
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Marketing High QualityMarketing High QualityOil ProductsOil Products
27o
0.4%
Asia/Australia
Fuel Oil
40 - 45%
Light Fuel Oil(LFO)
API Gravity
Sulphur
Markets
Use
% Production
Ultra LowSulphur Naphtha
(ULSN)
65o
< 1 ppm
Australia
Petrol, Diesel, Jet
55 - 60%
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4 Best practice air emission levels4 GHG goal to match conventional oil4 Dry process4 Ultra-low sulphur naphtha
Stuart (200,000 b/d)4 Investment: A$8 - 9 billion4 Balance of payments: A$3 billion/yr4 15,000 permanent jobs
Industry (1,000,000 b/d)4 Investment: A$40 billion4 Balance of payments: A$15 billion/yr4 65,000 permanent jobs
4 Regional development4 Aboriginal partnership
ECONOMY
SOCIETY
ENVIRONMENT
Building a Sustainable IndustryBuilding a Sustainable Industry