Enefit´s oil shale projects in Jordan October 2010 Andres Anijalg Project Manager Business Development Department Enefit
Contents • Enefit Overview • Enefit in Jordan • Oil and Power Projects • Development Plan + Next Steps 2
1. Enefit Overview Enefit (Eesti Energia in Estonia) is the largest oil shale mining and processing company in the world Eesti Energia • Vertically integrated utility (oil shale mining, shale oil production, generation, distribution, supply) • State owned Oil Shale Mining Shale Oil Production Oil Shale Power Generation • Over 50 years of continuous surface retort • Over 90 years operations with more than • Provides 95% of Estonia’s electricity production with more than 200 million 1 billion tonnes of oil shale mined to date generation with more than 550 TWh barrels of shale oil produced to date • Remaining reserves of ca. 500 mt produced to date • Technology involves: • Annual production ca.14 – 16 mt • Comprises over 2,380 MW of oil shale u Drying unit fired capacity – largest oil shale fired • 4 operating mines u Rotary kiln reactor plants in the world u 2 surface u Combustion unit for spent shale • Allows significant electricity exports u 2 underground • 2 x Enefit 140 units (operating) to Baltic region and Finland • 2,900 mining employees • New Enefit 280 unit under construction • Ensures security of supply • Experienced in remediation • Enefit proprietary technology considered to • 1,350 employees 12,000 hectares restored be best available processing technology Narva Open Pit Mine Balti Power Plant Eesti Power Plant Narva Oil Plant 765 MW 1615 MW 3
2. Enefit portfolio for oil shale developing Technology Project Provider Developer • Enefit Technology license • Enefit Technology license • Opportunity Analyses • Resource assessment • Conceptual Studies • Feasibility studies including mining, retorting, upgrading, • Pre-Design (bench tests) power production • FEED (pilot testing) • Testing • Technology package (design, • Plant construction & operation construction, operation) • Possible investment 4
3. Enefit Global Activities The Enefit Projects in Jordan are most advanced Enefit worldwide oil shale projects for oil and power production Estonia Project: Enefit 280 construction USA Developer: Eesti Energia (Enefit) Project status: construction ongoing Project: 50,000 bbl/d shale oil Enefit interest: technology sale Developer: OSEC, Mitsui, Petrobras China Project status: conceptual study completed Projects: shale oil production Enefit interest: technology sale Developers: Local mining companies Project status: MoU signed Morocco negotiations ongoing Projects: shale oil + power Jordan MoU with local partners for power Projects: 38,000 bbl/d shale oil Project status: opportunity analysis 600-900 MW power for oil Enefit interest: project development technology sale Project status: concession agreement signed on 11. May 2010 5
4. Enefit in Jordan The Oil Project in Jordan was started in 2006 September 2006 • Enefit initial visit to Jordan November 2006 • Shale Oil / Mining Memorandum of Understanding with NRA signed • Power Project Memorandum of Understanding signed by NEPCO, Government of Jordan and Eesti October 2007 Energia April 2008 • Oil Project Feasibility Study submitted to NRA April 2008 • Power Project Development Agreement signed by NEPCO, Government of Jordan and Eesti Energia October 2008 • Commencement of Concession negotiations with NRA May 2010 • Signing of the Concession Agreement with the Government June 2010 • Royal Assent 6
5. Enefit oil shale deposit in Jordan Attarat Um Ghudran - the total in place oil shale resource of Concession Area ca. 2.6 billion tons (1.5 billion barrels of shale oil) Map of Concession Area (incl. Right of First Refusal Area) Location in Jordan in Attarat Um Ghudran 282000 284000 286000 288000 290000 292000 Iraq Area = 23.5km 2 Area = 15.5km 2 Area = 11.2km 2 Syria 1087000 1087000 Other Blocks Reserve = 1560t Reserve = 1701t Reserve = 1700t OSEJ Jordan AUG 21 Concession Area AUG 28 AUG 25 (PETROBRAS) Right of First West Bank Refusal area 1084000 Area = 11km 2 Zarqa Refinery 1084000 Reserve = 1253t Road Amman AUG 22 Gaza Dead Sea Attarat Um Ghudran (Concession Area) 1081000 Israel Al Qatrana Area = 14.2km 2 1081000 Reserve = 1153t AUG30 AUG 23 (INCOSIN) 1078000 1078000 Right of First Concession Aqaba Egypt Refusal Area Saudi Arabia Area Red Sea 1075000 1075000 Area = 38km 2 Area = 32.0km 2 Reserve = 2,6 bn t oil shale Reserve = 1.8 bn t oil shale (1.5 bn bbl shale oil) (1.1 bn bbl shale oil) • Approximately 110 km south of Amman 282000 284000 286000 288000 290000 292000 • 50km east of Al Qatrana on the desert highway • Total OSEJ Concession Area and Right of First Refusal Area Area: 70 km 2 • Approximately 270 km north of Aqaba u In place oil shale: 4.4 bn t oil shale u 7
6. Key Characteristics of the oil shale deposit Attarat Deposit is the biggest known oil shale deposit in Jordan Views on the Attarat Oil Shale deposit • Very scarce vegetation of grass and bush Surface • No land use; nearest farm is 20km northwest • Muwaqqar Chalk Marl Formation, partly covered by Umm Rijam Chert Limestone Formation • Thickness varies from 25m-90m Overburden • Total overburden in Concession Area 2.0 bn m 3 and in the Right of First Refusal Area 1.7 bn m 3 • Oil shale layer variation from 10m-88m • Total over the 70km 2 area 4,530 m t Oil Shale Seam Concession Area 2,670m t u Right of First Refusal Area 1,860m t u • Aquifer at depth of 150m-200m • Aquifer has a thickness of 150m-180m Groundwater • Groundwater flows southwest to northeast • No spring or other discharge of groundwater • Oil Yield 9% over the two areas in average Oil Shale Quality • Heating Value of ca 5.5 MJ/kg 8
7. Enefit Projects in Jordan – Oil & Power Enefit has two parallel projects in Jordan – Oil Shale based Oil Production and Oil Shale based Power Production Mines Oil Shale Oil Shale (c. 26 m/t per annum) (c. 12 m/t per annum) Direct Burning Oil Recovery (Enefit) Power Station Shale Oil Gas Upgrader / Treatment Sulphur Syncrude Electricity Electricity 1200 t/d 38.000 bld/l 440 MW 600-900 MW Oil Project Power Project 9
8. Development Plan Oil Project – the industry complex will be established in 2 stages with 2nd stage partially financed by 1st stage cash flows Power Project – the project will be built up in stages according to the increase in power demand 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Resource & mining • Geological and hydrogeological survey • Shaft for pilot testing Mine Opening Mine Operation • Mining Studies Pre-Development • Enefit bench and pilot testing • Oil Upgrading Pilot Program Industrial Complex Stage I construction Stage I Oil Project • Environmental Studies 19,000 bbl/d Operation • EIA • FEED • Capital Raising • Applying for licenses and permits • Enefit 280 operations in Narva Stage II Industrial Complex Stage II construction Operation 19,000 bbl/d Pre-Development • Feasibility Study Direct Burning Construction Construction • Boiler Design (Foster Wheeler) Construction Power Station 600MW 900MW • FEED 300MW • EPC and PPA negotiations • Capital Raising Operation Operation 600(900)MW 300MW Pre-Development Construction Operation 10
9. Key Terms for the Concession Agreement (Oil Project) The Concession Agreement fixes the framework for developing and implementing the oil project • Exclusive rights to exploit oil shale within Concession Area • 4 years for project development, 40+10 years for commercial production • Environmental regime established • Hydrogeology rights granted • Agreed fiscal regime 11
10. Fiscal Regime - Royalty + Petroleum Tax The concession will operate under a Tax & Royalty fiscal regime. Royalty Petroleum Tax Payable on the revenues: Tax rate depends on the Revenue (R) and Cost (C) ratio • Minimum 1% if Brent (Real) < US$60/bbl; linear to • Minimum 15% if R/C < 1.25; linear to • Maximum 5% if Brent (Real)> US$120/bbl • Maximum 65% if R/C >= 5.0 6% 70% 60% 5% 50% 4% Royalty Rate 40% Tax Rate 3% 30% 2% 20% 1% 10% 0% 0% 0 30 60 90 120 150 0 1 2 3 4 5 6 Oil Price (US $ / Barrel) R-Factor (Cumulative revenue / cumulative costs) 12
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