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

2

S P P C P M

02/05/02

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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S P P C P M

02/05/02

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

4

S P P C P M

02/05/02

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

5

S P P C P M

02/05/02

Stuart Schematic X-SectionStuart Schematic X-Section

6

S P P C P M

02/05/02

Stuart Stage 1 Process FlowStuart Stage 1 Process Flow

7

S P P C P M

02/05/02

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

8

S P P C P M

02/05/02

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

9

S P P C P M

02/05/02

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

10

S P P C P M

02/05/02

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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S P P C P M

02/05/02

A$340M Stuart DemonstrationA$340M Stuart DemonstrationModule OperationalModule Operational

12

S P P C P M

02/05/02

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

13

S P P C P M

02/05/02

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

14

S P P C P M

02/05/02

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%

15

S P P C P M

02/05/02

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