NIS & ATOMENERGOPROEKT JOINT PROJECT FOR MINING AND PROCESSING OF OIL SHALE ON ALEKSINAC DEPOSIT (SERBIA)

1. NIS & ATOMENERGOPROEKT JOINT PROJECT FOR MINING AND PROCESSING OF OIL SHALE ON ALEKSINAC DEPOSIT (SERBIA) October 2012, Belgrade, Serbia

2. Agenda Introduction NIS overview ATOMENERGOPROEKT overview TTU-Ltd overview Benefits of joint participation References in the field of oil shale Current projects UTT-3000 technology overview Technology comparison UTT-3000 advantages Aleksinac project overview UWB sounding for geological prospecting & exploration

3. Introduction Global reserves of oil shale (in terms of oil) are many times larger than those of conventional oil. Estimates of global deposits range from 2.8 to 3.3 trillion barrels Estimates of Serbia deposits are 1.5 million barrels

4. NIS • One of the largest vertically integrated companies for the production of crude oil and gas in Southeast Europe • The company for exploration, production and refining of crude oil and natural gas as well as sales and distribution of a wide range of petroleum products • It possesses: • Crude oil and natural gas production • Refineries in Pancevo and Novi Sad • Own retail network • Energy business • Oilfield Services • Petrochemistry * Including NIS first chance Business center in Novi Sad

5. ATOMENERGOPROEKT • more than 80 years of successful operation • about 1800 highly experienced specialists • projects successfully implemented in 19 countries • certified quality management system ISO 9001 OJSC "Saint-Petersburg Research and Design Institute ATOMENERGOPROEKT“ (JSC" SPbAEP ") established on September 1, 1929. 118 power plants, including 18 nuclear power plants in 19 countries were built and put into operation based on “SPbAEP” designs. The Institute has been involved in the oil shale industry since 1950s, has designed 3 oil shale fired power plants, and all existing UTT-3000 and UTT-500 ATOMENERGOPROEKT today has: JSC “SPbAEP” head office

6. TTU-Ltd TTU Ltd – company possessing method patents and installations for processing oil shale by solid heat carrier (UTT) Established by specialists in the field of oil shale processing in 2006, reorganized in 2009 Goal of the company – development and distribution of technology for the processing of low-calorific solid fuels by high speed pyrolysis method Galoter Number of patents – 24 Number of inventors involved – 37

7. Benefits of joint participation NIS refining complex includes two individual locations: Pancevo and Novi Sad which are suitable for processing shale oil ATOMENERGOPROEKT has ultimate experience and exclusive rights to the design of UTT-3000 installations TTU-Ltd is the owner of patents and technology provider

8. References of ATOMENERGOPROEKT Oil shale based Power Facilities Oil shale based Power & Technological Facilities

9. Estonian PP, Narva, 1969-73,1610 MWe, 84 MWt Designed by ATOMENERGOPOEKT

10. Oil Factory 2хUTT-3000, Narva, 1980-84, 6660 tpd oil shale Today known as Enefit-140, designed by ATOMENERGOPOEKT

11. UТТ-3000 in KohtlaJarve, VKG Oil AS Today known as Petroter , designed by ATOMENERGOPOEKT

12. ATOMENERGOPROEKT Current projects • Nuclear Power Plants • 2xVVER-1200 Leningradskaya NPP-2 Saint Petersburg, Russia. • 2xVVER-1200 Baltic NPP Kaliningrad, Russia. • FN-800 Beloyarskaya NPP, Ekaterinburg, Russia. • 4xVVER-1000 Tianwan NPP, Tianwan, China. • VVER-1000 Busher NPP, Iran. • VVER-440 Kola NPP, Russia

13. ATOMENERGOPROEKT Current projects Oil Shale Projects 18xUTT 3000 El Lajun, Jordan INCOSIN 24xUTT 3000 Al Atarat, Jordan INCOSIN 24xUTT 3000 Bayer, Jordan INTER RAO UES 2xUTT 3000 Sultani, Jordan JOSECO 8xUTT 3000 Bayer, Jordan GLOBAL OIL SHALE Co. 2xUTT 3000 MishorRotem, Israel INTER RAO UES 2xUTT 3000 MishorRotem, Israel GLOBAL OIL SHALE Co. 24xUTT 3000 Sangruntau, Uzbekistan UZBEKNEFTEGAZ 24xUTT 3000 Tichara, Myanmar SNOG Ltd. 8xUTT 3000 Tarfaya, Morocco ZONA ENGINIRIE S.A.R.L.

14. The Essence of Processing Thermal decomposition of kerogen is the base of all oil shale processing methods. Maximum liquid yield can be achieved at the end point of thermobitumen decomposition . The higher the temperature the more coke and gas are formed. Heavy oil in conditions of tough permeability of fractured rock or in coarse fragmented shale is also condensed and polymerized forming coke and gas and lowering liquid yield. The point of total decomposition of thermobitumenvaries for different kinds of oil shale as per temperature as well as per yield of coke which depends on H/C ratio. This is why in-situ heating process will never exceed energy efficiency 40-50% leaving carbon and heavy oil in-situ.

15. The Essence of Processing Thermal decomposition of kerogen is the base of all oil shale processing methods. Maximum liquid yield can be achieved at the end point of thermobitumen decomposition . The higher the temperature the more coke and gas are formed. Heavy oil in conditions of tough permeability of fractured rock or in coarse fragmented shale is also condensed and polymerized forming coke and gas and lowering liquid yield. The point of total decomposition of thermobitumen varies for different kinds of oil shale as per temperature as well as per yield of coke which depends on H/C ratio. This is why in-situ heating process will never exceed energy efficiency 40-50% leaving carbon and heavy oil in-situ.

16. UТТ-3000 Flowsheet

17. Balance scheme Raw Oil Shale 2,500 thsnd t (500 thsndt.o.e.) Efficiency: On commodity products-80.0 % General (incl. own needs)-85.5% UTT-3000 installation outlet 456.4 thsndt.o.e. Efficiency 91,3% Gas 101.7 thsnd t (82.5 thsnd t.o.e.) Petrol fraction 40.5 thsnd t (39.8 thsndt.o.e.) Medium oil 117.5 thsnd t (106.7 thsnd t.o.e.) Diesel fraction 29.6 thsnd t (28.9 thsnd t.o.e.) Gas petrol 22 thsnd t (21.7 thsnd t.o.e.) Steam 900 thsnd t (56.7 thsnd t.o.e.) Heavy oil 139.9 thsnd t (120.1 thsnd t.o.e.) Electricity 203.6 mln kWh (17.5 thsnd t.o.e.) Steam and heat 100,040 Gcal (10 thsnd t.o.e.) Synthetic oil 350 thsnd t (317.3 thsnd t.o.e.) Electricity 374.2 mlnkWh (32.2 thsndt.o.e.)

18. Other known technologies Chevron Crush Shell ICP ATP Processor

19. Other known technologies Lurghi-Lurgas Union B Kiviter / Fushun Process IGT Petrosix

20. Technology comparison Final result show how much share of in-situ oil shale energy goes to the profit forming: PROFIT = Final result * Oil Shale Resource Energy in BOE * Oil Price Source: “RESOURCE- Evaluation Model for Choice of Oil Shale Mining and Processing Technologies “, 28th Oil Shale Symposium, October 13-17, 2008

21. UТТ-3000 Advantages Source: Marketing researches by TTU Ltd submitted to NRA, Jordan, 2010

22. Opportunities and Prospects • Theopportunityofprocessingof hydrocarbonaceouswastes in UTT – used tires (upto10% wt), oil soaked soils (20-25 % fromvolumeofoilshale), tars, cakes, etc, willprovideanadditionaloutputofliquiddistillates • Shaleoilcanbeusedastheactivatorforprocessingtheheavyoilresidues (tar, malta, blackoils). In thermal processes of heavy oil residue processing (visbreakingandthermocracking),application of oil shale activators increases the yield of lightproducts from 20%upto 60%, andinhydrogenizationprocesses (hydrocracking) theyield of light products for one cycle increases from 50% up to 90%, thus process speed is2 times higher, and working pressure is 2 timeslower. • The UTT installationscanbeaddedwithoil&gasfired power plants withthe capacity of up to 100 МWper unit. TheopportunityofregulationofanoutputofliquidandgaseousproductsfromUTTover a widerangeallowsthe plant to be quickly switched from fuel production to electric powergeneration and to serve as peak smoothing power generation facility. • TheUTT complex can be added with cement works - for the production of cement it is possible to use cement clinker producedfromcyclonicshale ashes, limestone, fuelandenergy. • UTT can be added with melting oven to melt ash – it will enable production of clinker and extract metals from ash.

23. Environmental Analogue: Operating plant Petroter based on UTT-3000 located in confines of KohtlaJarve town in European Union.

24. Standard EE 0579981-NJ ST 9:2005 "Oil Factory Products"

25. Aleksinac oil shale deposit • The exploration area is located in the south-eastern part of Serbia. • Potential reserves (resources) of oil shale on the territory under exploration Aleksinac estimated at 2 billion tons. • Organic content up to 16.6% and an average oil content of 8.95%. Source: Project of geological exploration of Aleksinac deposit, NIS, 2010

26. Aleksinacoil shale deposit Oil shale Brown coal Source: Project of geological exploration of Alecsinac deposit, NIS, 2010 q

27. Aleksinacoil shale deposit Geological section of the Aleksinac deposit Source: Project of geological exploration of Aleksinac deposit, NIS, 2010

28. Structure of proposed production Quarry Retorting unit Distillation Unit Mining Oil Shale 5 mlntpy Processing Oil Shale 5 mlntpy NIS refineries • Gas 0,5 mlntpy &Recovered Heat115,000 toe NIS pipeline, railroad • Shale Oil 0,5 mlntpy • Overburden Filling back 5 - 7 mlntpy Processing 5 mlntpy Turbine House Petrol, Diesel oil, Fuel Oil, Asphalt Electric power 1,600 mln kW-h (200 MW)

29. Shale oil as activator for heavy oil processing Shale oil can be used as the activator for processing the heavy oil residues (tar, malta, black oils, thick crude) in oil refineries. In thermal processing of the heavy oil residues (visbreaking and thermo-cracking) application of oil shale activators increases the yield of light products from 20% up to 60%, and in hydrogenization processes (hydrocracking) the yield of light products for one cycle increases from 50% up to 90%, thus speed of process is 2 times higher, and working pressure is 2 times lower. Proper industrial test runs were made in Angarsk petrochemical plant. Use of 500 thousand ton of shale oil as activator in NIS refineries for processing 5 mln ton of crude oil will increase yield of petrol and diesel oil.

30. Proximate economic evaluation of Aleksinac project5 mlntpy (8,600 bopd)

31. UWB sounding for further geological prospecting & exploration Elaborated method of impulse Ultra Wide Band Electro Magnetic Sounding (UWB) allows to find the oil shale layers and distinguish them by rich and poor grades. Risky costs of prospecting works are ten times lower in comparison to drilling.

32. UWB sounding for further geological prospecting & exploration

33. UWB sounding for further geological prospecting & exploration

34. Conclusion The Republic of Serbia, in partnership with NIS, Atomenergoproekt and TTU-Ltd possess all necessary resources, capacities, experience, funds, skills and access to technology required to implement the project of development of oil shale starting from Aleksinac deposit, and expanding the experience to other deposits, and to include oil shale into the energy balance, being friendly to the environment and for the benefit of the Serbian people.

35. Thank you! October 2012, Belgrade, Serbia