Growing Foreign Markets China, a net importer

Growing Foreign Markets

China, a net importer of oil, and the world’s most populated country, is the second highest consumer of oil behind the US whose energy needs are forecast to be increasing 150% by 2020.  Its oil consumption rate is growing at seven times that of the US, and China is investing heavily in new oil pipelines and infrastructure to accommodate this ramp-up.  It is forecasted that 70% of Chinas imported oil will be coming from the Mid-East and Central Asia by 2015.  Management believes that the Company’s AOT technology holds the potential to provide advantages for the Chinese pipeline industry to assist in this growth.

India, a net importer of oil, is the second most populated country and is directly competing with China in securing oil supplies and infrastructure to fuel its own rapid growth.  India currently imports 70% of its oil, and is forecast to increase this number to 85% by 2020.  India is investing heavily in pipelines and infrastructure to accommodate this ramp-up. Management believes that the Company’s AOT technology holds the potential to provide advantages for the Indian pipeline industry to assist in this growth.

Asia boasts the global region with the largest growth forecasts and is expected to grow from $20.9Bn in 2010 to $32.1Bn in 2020.  Asia is a very promising region in that its growth is largely being fueled by state-owned companies under direction from their respective governments.  The total market forecast for this region is expected to be worth up to $306.5Bn from 2010 to 2020.  Management believes that there is the potential for strong interest in the Company’s AOT technology in these regions. According to the United States Energy Information Administration, “China consumed an estimated 9.2 million barrels per day (bbl/d) of oil in 2010, up nearly 900 thousand bbl/d, or over 10 percent from year-earlier levels. China's net oil imports reached about 4.8 million bbl/d in 2010 and it became the second-largest net oil importer in the world behind the United States in 2009. EIA forecasts that China's oil consumption will continue to grow during 2011 and 2012, and the anticipated growth of 1.1 million bbl/d between 2010 and 2012 would represent almost 40 percent of projected world oil demand growth during the 2-year period (– Source: www.eia.gov/countries/cab.cfm?fips=CH).