Blue Water Petroleum Corp. said June 25 it signed a letter of intent with European company Viscos Energy Partners to form a joint venture (JV) company.

The 50/50 JV company will be called Sludge to Oil (STO) and will operate Viscos' patented mobile microwave system for the remediation and upgrading of crude oil sludge's in the U.S. Field operations will launch in the Rocky Mountain region.

Viscos' microwave treatment liquefies, separates and upgrades crude oil sludges and creates a marketable product while substantially reducing hazardous environmental waste. Visco will provide microwave equipment, training, field support and maintenance while Blue Water, based in Centennial, Colo., will establish field operations.

Viscos will contribute new patents and licenses to Blue Water contingent upon Blue Water providing an initial funding of up to $2 million. Blue Water will recoup the initial funding from future revenues of STO.