1 © Wärtsilä 22 October 2010

WÄRTSILÄ CORPORATION

Wärtsilä – lifecycle power solutions

SHIP

POWER

POWER

PLANTS

SERVICES

2 © Wärtsilä WÄRTSILÄ CORPORATION

Net sales €5,3 bn

18,000 employees

170 locations worldwide

3 © Wärtsilä 22 October 2010

Global oil & gas sector emissions

• Estimate by Carbon Limits (Norway) • Very low level of accuracy due to absence of aggregated, monitored operational data.

MMtCO2e

500

1,000

Venting (CH4) Fugitives (CH4) Flaring (CO2+CH4)

Gas treatment (CO2)

Wasted energy

630 570 ~550 ~500

~ 6-8% of global GHG emissions

Flares waste

+75GW power

4 © Wärtsilä 22 October 2010

Flexible solutions for onshore oil & gas

Field Power Plants 5 – 200 MW

Associated Gas fired (Flare gas)

Fuel Sharing (associated gas + crude)

Natural gas (pipeline quality)

Crude Oil fired

Oil Pump Drives 1 – 15 MW / unit

Crude Oil fired

Natural Gas fired

Associated gas

Compressor Drives 4 – 9 MW / unit

Natural Gas fired

Associated Gas fired

Fuel Sharing (associated gas + crude)

CO2 emission reductions

0

50 000

100 000

150 000

200 000

250 000

300 000

1 2 3 4 5 6 7 8 9 10 11

t C

O2

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

Total emission reductions / Year Cumulative emission reductions

5 © Wärtsilä 22 October 2010

Petroamazonas gas optimization project, Ecuador

“Optimización Generación Eléctrica” started 2009

US$100 million investment

Produces 100.000 boe p.d. p (+500.000 b water)

Power demand 61MW 83MW by 2012

AG capacity to 59MW by end of 2010

Centralized power gen 150 30 units

Wärtsilä supplying gas/crude engines and co-

developing CDM project under AM 0009

Block 15 divided into 2 sections,

Flaring currently 4 locations, 30 locations needing power

drilling

Section ILYP • Optimization of gas utilization

• Centralized power production

• Equipment overhaul/improvement.

Section Eden Yuturi / Pañacocha • New generation capacity

• Optimization of gas utilization

Wärtsilä 18V32LN Gas-Crude conversion

• The gas diesel engine is a dual fuel / multi

fuel engine that is designed to operate in

three modes.

– Liquid fuel mode, using MDO/LFO, HFO

or Crude Oil as main fuel.

– Gas fuel mode, using gas as main fuel

ignited with a small amount of liquid fuel.

– Fuel sharing

• In liquid fuel mode the engine works as an

ordinary diesel engine.

• In gas fuel mode the engine is adapting the

direct gas injection technique for gas

injection.

• In fuel sharing the engine is using both liquid

and gas in different ratios

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

Fuel Sharing

0

10

20

30

40

50

60

70

80

90

100 Fuel oil operation

Engine load%

Gas

share %

Diesel

share %

GD operation

Transfer window

Fuel Sharing

8 © Wärtsilä 22 October 2010

CDM projects under AM0009

Gas flare reduction – AM0009

Total Annual CERs

Rejected or withdrawn 10 1 126 000

Total active projects 20 11 414 000

Registered with the UNFCCC 8 8 326 000

- Of which with issued CERs 2 1 068 000

Under review 1 291 000

Under validation 11 4 026 000

Source: GGFR presentation, Carbon Expo, May 2010

9 © Wärtsilä 22 October 2010 R. Stoor

Issue 1: Dynamic gas volume and quality

Comportamiento Suministro Gas CPF dia completo 15 y

21 de marzo 2009

0.0000

2.0000

4.0000

6.0000

8.0000

10.0000

12.0000

14.0000

16.0000

mm

pc

pd

150309

210309

10 © Wärtsilä 22 October 2010

Issue 2: Dynamic field development

11 © Wärtsilä 22 October 2010 R. Stoor

Issue 3: Complexity of engineering

ILYP

• 50*30km2 in size

•150 generation units

• over 20 locations operating independently

• distributed power generation

• no centralized gas handling

12 © Wärtsilä 22 October 2010

Viewpoints on AM0009

• Take into account the dynamic nature of oil field development in the

demands of historical data and monitoring

Individual well flaring data is impractical and conflicts with fiels

development activities

• Recognize the complexity of associated gas as a fuel source / feedstock

it is an inherently unstable and declining fuel which means that past

use of AG is not a limiting factor for methodology application

• Allow flexibility in adapting technology to the existing infrastructure and

local realities as there are significant differences between fields

The focus on flare points at the level of oil wells does not recognize the

complexity of the oil field infrastructure and the varied location of the flare

points

• Methodology needs to be updated to account for more complex baselines

recognize the difference in flaring at facility and field level and that part

of associated gas can be used on site in the absence of the project.