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Ivanhoe Energy And SBM Offshore Sign Alliance To Accelerate Development Of Un-tapped Offshore Heavy Oil Resources

Alliance represents another significant step to commercialize HTL

CALGARY, March 20, 2013 /PRNewswire/ - Ivanhoe Energy (TSX: IE) (NASDAQ: IVAN) and SBM Offshore (SBM) are pleased to announce they have formed a global strategic alliance (Alliance), combining their respective expertise to create Floating, Production, Upgrading, Storage and Offloading vessels (FPUSO's).

The two companies have combined their respective technologies and experience to produce a first of its kind design for offshore facilities that will economically produce and upgrade heavy oil from offshore fields with crude oil quality down to 10 °API gravity, or lower. "We expect this combination of technologies to become the pre-eminent method for producing and upgrading heavy oil at offshore locations around the world," said Michael Wyllie, SBM Chief Technology Officer.

Industry experts have estimated that offshore heavy oil resources exceed 500 billion barrels recoverable.  Given the global abundance of such oil deposits and depleting conventional oil supplies, this Alliance creates significant potential for the offshore heavy oil sector.

SBM is a publicly traded, world leader in providing offshore Floating, Production, Storage, and Offloading (FPSO) vessels.  With a market cap of over US$ three billion and over 7,000 employees, SBM currently has around 1 million barrels of throughput per day from a fleet of 16 production systems in operation world-wide.

Ivanhoe Energy's Heavy-to-Light (HTL) process is a partial upgrading technology that drastically reduces the viscosity of stranded heavy oil resources and produces a high quality synthetic crude oil that commands greater value from refineries around the world. In addition to creating operating efficiencies, the technology will greatly improve the economics of heavy oil development. HTL's small footprint and modularization capability makes installation on FPSOs possible.

Moreover, by providing a source of lighter oil on the FPUSO, some of this fluid can be re-circulated back to the subsea wells, providing a robust solution to overcome the flow assurance challenges of subsea heavy oil wells.  This important feature can be an enabler for heavy oil field developments, especially those in deep water.

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