START UP OF A SMALL REFINERY TO PROCESS EAGLE FORD PRODUCTION Herb Whitney Lazarus Energy

Cautionary Statements Forward Looking Statements: Certain of the statements included in this document, which express a belief, expectation or intention, as well as those regarding future financial performance or results, or which are not historical facts, are “forward-looking” statements as that term is defined in the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.  These forward-looking statements are not guarantees of future performance or events and such statements involve a number of risks, uncertainties and assumptions, including but not limited to significant dependent relationship with Genesis and its affiliates; key supplier failure; loss of market share with or by a key customer; failure to comply with forbearance agreements relating to long-term indebtedness under which Blue Dolphin Energy Company (“Blue Dolphin”) is in default; continued declines in throughput volumes and production rates from Blue Dolphin’s U.S. Gulf of Mexico leasehold properties; and the factors set forth under the heading “Risk Factors” in Part I, Item 1A of Blue Dolphin’s annual report on Form 10-K for the twelve month period ended December 31, 2011.  Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated in the forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  Blue Dolphin undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

LAZARUS ENERGY OVERVIEW

Subsidiary of Blue Dolphin Energy Co. Company based in Houston, Texas Acquired Nixon Refinery in June 2006 Approx. 50 employees

NIXON REFINERY Refinery located near Nixon, TX 50 miles SE of San Antonio and 110 miles north of Corpus Christi Built in 1980 primarily for jet fuel production Idle since 1993 15,000 BPD capacity Major Units: Crude distillation Naphtha splitter Merox unit Bender Unit ~265,000 bbls storage

CRUDE SUPPLY Pipeline Access Koch Pipeline: Access, Quality Local Crudes: Availability 2006-2010, Quality, Financing, Competition Eagle Ford 2011 Availability Increased Competition: Pipelines, Local LLS/WTI Differential Transportation: Truck Only

START UP Supply Agreement Late 2011 Guaranteed supply of crude Construction financing Joint Marketing Agreement Crude payments Repayment of construction financing Profit sharing Back office support

START UP Limited start up February 2012 Normal start up issues New personnel-training Identify potential customers Past contacts Initial production 1000 to 2000 bpd (average – based on batch) Product quality Crude quality

START UP Ramp up production End of February at 7000 bpd Attractive pricing initially

PRODUCT MARKETING Local market opportunities Diesel low sulfur NRLM. feedstock Small refiner Naphtha blending, feedstock VGO feedstock, blending Houston and Corpus Christi markets New market entrant Volumes already committed

PRODUCT MARKETING Reliability History Small refiner Quality Testing Logistics Truck only Access to water limited

PRODUCT MARKETING Truck traffic Scheduling and coordination 60 to 70 trucks per day

Possible Future Opportunities Increase capacity 15,000 plus bpd Unit modifications Pipeline connections; crude and products Marine access Corpus Christi Victoria Other

Possible Future Opportunities Gasoline blending San Antonio market Components availability Jet Fuel Modifications minimal DESC contracts