CANADA VENTURE: Genoil In Talks With BP To Clean Up Oil Spill

14th Jul 2010 17:00

By Caroline Van Hasselt Of DOW JONES NEWSWIRES TORONTO (Dow Jones)--Canada's Genoil Inc. (GNO.V) is in talks with BP Plc (BP) to help clean up the oil-polluted Gulf of Mexico waters and beaches. "We were approached by BP, and we've been exchanging a lot of information with them," says Genoil Chief Executive David Lifschultz. Calgary-based Genoil specializes in heavy-oil upgrading, water-purification technologies, well testing and sand cleaning. A technology research and development company, it developed the Crystal Sea, an oily water separator, also known as a bilge separator, that can reduce impurities in water to 5 parts per million without the use of any chemicals at a cost that's lower than conventional separators. By law, the current standard is 15 ppm. "We're new. So even though we're commercial and scaled, it takes awhile to break in a new idea," says Lifschultz in an interview from Dubai, where Genoil is also vying for a major contract to clean the 600 miles of the 1991 Gulf War oil-contaminated beaches. The company recently received a U.S. patent for its sand-decontamination reactor technology that can return the earth to agricultural-grade soil. "We can take the oil down to almost an infinitesimal level on the beaches," he says. Lifschultz, a New York-based investor who owns 29% of Genoil, incubates new technologies that he feels can have a major impact on the world economy. The company, which isn't generating any revenue yet, is focused mainly on selling its heavy-oil upgrading technology that converts sour, or high sulphur, heavy oil into lighter oil with higher-quality distillates for conventional refining. But its Crystal Sea reactor is timely for BP. The oil giant has 1,300 people reviewing more than 120,000 clean-up ideas, says BP spokesman Robert Wine. Last month, it signed a contract with Hollywood actor Kevin Costner's Ocean Therapy Solutions for its V20 centrifuge oily water separator, which Lifschultz says is inferior to Genoil's system. Ocean Therapy's CEO John Houghtaling II, a Metairie, La.-based lawyer, said in an email that the V20 received U.S. Coast Guard approval "over a month ago" and "can run parallel to get below 15 ppm in proper conditions." The American Bureau of Shipping, the industry's standard setter, has no record of its equipment being vetted or type-certified. Costner told the U.S. Congress last month that "red tape" has blocked his attempts to employ his company's technology for past 17 years. The V20, which isn't patented, leaves a 1% impurity, which is 10,000 ppm. Genoil's Crystal Sea received U.S. Coast Guard approval in 2007 and is ABS-vetted. Romania's Iasi thermal power plant has been using 10 Genoil machines to clean heavy-oil-contaminated water for the past six years without breaking down, Lifschultz says. Instead of selling units, the company is focused on selling a water-cleaning service to ports, so far snaring memorandums of understanding from three of China's busiest ports -- Qinhuangdao, Tianjin and Tangshan. BP says Genoil has passed two of its three stages. The third stage, where 400 cleanup ideas are being evaluated, involves a technical assessment. Once that's passed, BP will start field tests. The 15-person Genoil team is on 48-hour standby waiting for BP's call. In order to get more publicity for his company, "People say, I should go to Hollywood and take out one of the famous movie actresses," laughs Lifschultz. -By Caroline Van Hasselt; Dow Jones Newswires; 416-306-2023; [email protected] TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at [email protected]. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments. (END) Dow Jones Newswires July 14, 2010 12:00 ET (16:00 GMT)