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

2. 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.

3. LAZARUS ENERGY OVERVIEW

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

5. 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

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

7. 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

8. 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

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

10. 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

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

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

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

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