China has imposed a graduated tax on income that exceeds US $40 dollars per barrel from the sale of oil from locally produced crude. There are five levels of tax, beginning at 20 per cent and rising to 40 per cent, when the US barrel price exceeds $60. Lubricants is the only petroleum category to be subjected to the full levy, which financial commentators say has been imposed by the country's Ministry of Finance wanting to consolidate oil pricing. This is almost sure to mean a rise in the cost of base oils and more expensive refined products for the consumer. It is thought that an undisclosed proportion of income from the tax on crude oil sales will be used to subsidise refiners. These moves come just as the China National Offshore Corporation has announced a US $12.5 billion investment in oil and gas exploration over the next five years. By 2010, CNOOC expects to have a production capacity of 50 million tons of oil equivalent, including 38 million tons of crude oil.
2. EARL6 given top marks in user research EARL6 has just been given a very positive vote of confidence in OATS' regular research amongst EARL users. With many new features and revised screens in EARL6 it was vital to ensure that the new generation of the software was meeting its key objective of delivering detailed information effectively. And, without exception, the users – representing 15 countries – gave EARL6 a very warm welcome. The new functionality of Simple Surveys, 'Instant' dealer charts and saving reports to Excel all scored highly with some approval ratings at the 90% level. The recent doubling of data added to EARL each year – now up to 8,000 models p.a. – was reflected in very high scores for the completeness of data in the package. OATS was also keen to assess users' needs in terms of oil change interval data – an area of increasing complexity and frequent uncertainty. The research asked about change intervals: by time and distance, by lube quality, by service conditions, by capacities and by climate and all 5 conditions were seen as equally important. So, whilst the OATS development team can reflect on a job very well done in preparing EARL6, they now need to address the tricky problems of presenting change interval data.
BP has started to build an industrial lubricant blending plant at Taicang city, in Jiangsu province, China, at a cost of US $22 million. It will be the company's largest such facility in the country, and will be completed by the end of 2006. It will have an annual production capacity of 45 million litres, increasing to 70 million litres by 2010. BP also has an 80 million litre blending plant at Shenzhen in Guangdon province, and imports lubricants from its other facilities around the region. The company currently distributes in twenty-five Chinese provinces.
Chevron Corporation has announced that it is to spend about $300 million on a five per cent share of Reliance Petroleum Limited. This is a company formed by Reliance Industries Limited to own and operate a new export refinery being built in Jamnagar, India. This is expected to begin operation in December 2008, and will have a daily crude capacity of 580,000 barrels; the refinery will process 'hard-to-refine' crude. Reliance currently operates a 650,000 barrels per day refinery in Jamnagar, where the crude processed is lighter than that intended for the new plant. The new refinery will be the world's sixth-largest refinery on a single site, and the two together will comprise the largest complex in the world, based on current capacities. Chevron and Reliance have also signed two memoranda of understanding to 'optimise the refinery crude supply and product marketing ... and pursue other collaboration opportunities in the energy value chain'.
BP Australia has signed two contracts and a memorandum of understanding to provide consumers with over 200 million litres of biofuel per annum by 2008. This means that the company aims to deliver more than half of the Australian government's national target of 350 million litres in what has been called 'a unique change to the composition of Australia's fuel supply'. BP's investment will enable its Bulwer Refinery in Queensland to make 110 million litres per annum of biodiesel made from tallow, and market it from 2007. The memorandum is to purchase the entire output from a new ethanol plant to be built by Primary Energy Pty Ltd in Kwinana, Western Australia. This will produce 80 million litres of ethanol per annum, selling across Australia from 2008. BP has also negotiated to buy 23 million litres of ethanol from the CSR Sarina distillery near Mackay, to be blended and sold in the Queensland markets from later this year. This is all part of the company's intention to 'invest in refining and distribution infrastructure and secure product to enable biofuels to play a role in the future of Australia's petroleum supplies'.
Ford has announced that it is to retire its trademark specification Mercon automatic transmission fluid, and will therefore issue no new licences for it from 1 July. All existing licences will expire at the end of June 2007. The aim is to encourage the lubricants industry to adopt Mercon V, which Ford introduced in 1997 when the company began building transmissions for some of its larger trucks, cars and vans. It was designed to improve friction material stability, prevent torque converter clutch chatter, and lower overall operating temperature, including shift temperature. In characteristics and suitability, Mercon V is closer than Mercon to the automatic transmission fluid used by Ford in factory fill over the past several years. But it is more expensive, and subsequent services tend to prefer Mercon ATF. Ford wants the industry to realise that all transmissions recommending Mercon ATF can now be serviced with Mercon V, and that this is the better fluid. Ford and GM have now gone their separate ways so that Mercon V spec fluids do not meet the Dexron VI requirements and Dexron VI fluids cannot be used where Mercon V is specified.
The Chinese government has approved Mazda Motor Corporation's investment in Changan Ford Automobile Co. Ltd, the joint venture between Changan Automotive Group and Ford Motor Company. The new restructured business is to be called Changan Ford Mazda Automobile Co. Ltd. Changan is a 50 per cent shareholder; Ford and Mazda have 35 per cent and 15 per cent interests respectively. According to Mazda, the move will help the company to achieve its mid-term goal of producing and selling 300,000 units in the Chinese market by 2010. This is the latest step in a long-term strategic partnership between the three parties that has been developing rapidly over the last two years. It includes a joint expansion of the Chongqing assembly plant, whose current annual capacity of 150,000 units will have been improved by one-third by May 2006. The new business is being hailed as a major step in the three party partnership programme in China, clearing the way for similar arrangements to be brought to speedier conclusions in Chongqing, and at Nanjing where the three parties are building a brand new assembly plant. This is expected to be operational in 2007, with an initial annual capacity of 160,000 units.
Ford Motor Company has pledged to export more vehicles from the United States to China. In 2003, the carmaker launched its volume export programme there to meet customer demand in China for US-built Ford sport utility vehicles. The commitment to export was recently marked by a ceremony in Los Angeles attended by China's Vice Premier and senior officials from the country's Ministry of Commerce. Ford is to supply its operations in China with £120 million worth of parts, components and vehicles.
ILMA has issued a statement that from 1 June 2006 to 31 May 2010, any 'wholesale purchaser-consumer', including those member organisations that store and dispense diesel fuel on site for their own vehicles, must label their diesel fuel pumps with a specific form of words. The notices have also to conform to certain design regulations. Pumps for Ultra Low Sulphur Diesel (ULSD) fuel (maximum 15 ppm sulphur) carry the message that the fuel is recommended for use in all diesel vehicles and engines. But pumps for low sulphur diesel (maximum 500 ppm sulphur) must state that federal law prohibits use in model year 2007 and later highway vehicles and engines, and that its use may damage these vehicles and engines.
10. Toyota set to depose GM This year, the Japanese carmaker Toyota is poised to overtake General Motors as the world's biggest car company. Toyota is expected to sell about 9 million vehicles around the globe. The press has been probing into the business philosophy of its president, Katsuaki Watanabe, which is apparently to create 'dream vehicles that will not harm the environment, will never have accidents, and will make their occupants healthier as they drive'. The media also likes Watanabe's philosophies for his employees, and Toyota's development of environmentally-friendly vehicles: smaller cars, electric engines, and greater computer control. This shift in vehicular super-power comes at a time when Toyota is down-sizing as regards vehicle bulk and cost. Toyota claims to have in mind the problems of rising carbon dioxide and dwindling world oil resources. Both these considerations, and the company's continued advance ahead of the competition, are important, as it considers whether to build a range of low-cost vehicles specifically for those new markets that are opening up in China, India and Brazil.
LubMat is a two-yearly conference organised by the Jost Institute for Tribotechnology (University of Central Lancashire, UK) and Fundación Tekniker (Spain). It takes place at alternating venues in the UK and Spain; LubMat 2006 is to be held at the University of Central Lancashire, Preston, UK, 14-16 June. The intended delegates are plant engineers, industrial engineers, tribologists, lubrication experts, and lubricant/additive chemists. These people, say the organisers, will be concerned with all aspects of the management and technology of lubrication engineering associated with maintaining and operating large and small machinery and plant. It will also appeal to academics who specialise in projects related to commercial applications. This year's topics include lubrication management, lubrication technology, lubricants and additives, and lubricants testing. For more details, contact lubmat@uclan.ac.uk
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