A retort is located within a cylindrical chamber with annular space between them. The products of combustion from a furnace pass into said annular space. A flue pipe carries off gases from said space. A perforated plate located at the bottom of the retort and means are located within the furnace for heating air and superheating steam. Perforated pipes deliver air and steam to the retort and a condenser is provided wherein oil vapour produced in the retort is condensed.