Forward to friend Subscribe contact OATS alt oats OATS Bulletin. Issue 83 – June 2007

Contents
Click on any of the story titles below to go straight to the news item. Click here to download a pdf version of this Bulletin. 83Bulletin.pdf

1 . Eni buys ExxonMobil lubricants operation in Europe and expands in the new World and India
2 . Lukoil joins Europe’s ATIEL and signs up with Kamaz
3 . Are you ready for Europe’s REACH?
4 . New Freedonia study forecasts increasing lubes demand
5 . Install the soothing new ‘Vital Link’ screen-saver from OATS
6 . Ford raises US gasoline oil change interval and unveils new Mercon LV
7 . GM post Dexron-VI licensees list
8 . Lubes ‘n’ Greases to launch Europe, Middle East and Africa edition
9 . Oil companies post mixed first-quarter results
10 . Singapore company Hyflux in Saudi lubes recycling project
11 . Komatsu opens second India plant for dump trucks
12 . Chevron’s University gets STLE approval
13 . New report on dual clutch transmission trends in Europe
14 . Bio-lubes company claims synthetic-like performance
15 . CNOOC to open base-oil plant in China
16 . Private equity in Allison moves



1. Eni buys ExxonMobil lubricants operation in Europe and expands in the new World and India

Italy’s Eni SpA – the country’s biggest oil company – has agreed with ExxonMobil Central Europe Holding GmbH to buy Esso’s shares in Esso spol s.r.o (Esso Czechia), Esso Slovensko spol s.r.o (Esso Slovakia) and ExxonMobil Hungary Kft. The agreement includes ExxonMobil’s retail station network in three countries, totalling 102 stations, and its aviation business at Prague and Bratislava airports. It also includes the lubrication business carried on in these three countries by ExxonMobil Petroleum and Chemical, BVBA, Brussels, although ExxonMobil will continue to carry out its chemicals business in the three countries.
Eni has also been active in the Gulf of Mexico, where it has bought offshore natural gas and oil exploration and production operations from Dominion Resources, based in Virginia, USA, for £4.76 billion. The sale is expected to close in July, 2007.
In India, ENI has applied to enter the country’s lubricants market by supplying expertise and licences for India’s Apar Industries ‘to manufacture and sell lubricating oils, greases and special products for industrial, automotive and marine applications’. If successful, some 1,500 tons of product would be produced by Apar in 2007-8, with production of high-end lubricants rising to 6,000 tons by 2011-12.
More at ENI release

Back to Top


2. Lukoil joins Europe’s ATIEL and signs up with Kamaz
Russia’s Lukoil, which has an annual turnover in excess of $30 billion and is represented on the London Stock Exchange, has just joined ATIEL – the Technical Association of the European Lubricants Industry. According to Lukoil, this ‘recognises Lukoil as an equal member of the European engine oil market’ and ‘provides an opportunity to our company, represented by LLK International, to take an active part in the creation of the European engine oil quality standards, and build a close co-operation with engine and industrial equipment producers’. LLK International produces and markets engine oil products at six plants in Russia and overseas, and produces over 40% of all oils in Russia. Lukoil-branded lubricants are sold in some twenty countries. More at: ATIEL news
In Russia, the company has just signed an agreement of co-operation with Kamaz, effective 2007-2010, which states that Lukoil-branded lubricants will be used for the first fill of Kamaz trucks, buses and automobiles. The parties have also agreed ‘to pursue a unified engineering policy and sustain partnership in terms of petroleum, oil, and lubricant quality’. This arrangement is part of a relatively new policy that Lukoil has been pursuing over the last year, to the point where it currently has similar arrangements with four vehicle manufacturers and has stated that the company is looking for similar deals.

Back to Top


3. Are you ready for Europe’s REACH?

The new REACH legislation came into force in Europe on 1 June 2007. REACH stands for Registration, Evaluation and Authorisation of Chemicals, and is an EU initiative that aims to ensure that water, air, soil and the human environment are not contaminated by chemicals. This will help to maintain biodiversity, and safeguard health and safety in the workplace and the environment. The legislation affects products manufactured in Europe and those that are imported, which will impact on petroleum products, lubricants, additives, greases, etc.
Pre-registration must be made by 1 June 2008. Thereafter, registration will proceed in three phases. High-volume or high-hazard chemicals have to be registered by November 2010; moderate-volume chemicals must be logged between then and June 2013; and the lowest volume chemicals must be detailed by June 2018. The hub of co-ordination and the operational databases is the European Chemicals Agency in Helsinki, Finland. Here too, chemicals will be evaluated, and a public database of hazard information will be maintained. In the near future, the European Chemicals Agency will be opening a website dedicated to REACH. For the moment, however, you can access Reach Ready which is a wholly owned subsidiary of the Chemical Industries Association and claims to be ‘the foremost place to go for help with REACH’.

Back to Top


4. New Freedonia study forecasts increasing lubes demand

A recent 397-page world lubricants study by the Freedonia Group Inc suggests that world demand for lubricants will increase by 2.3% per year to 41.8 million metric tons in 2010 and some 46.6 metric tons by 2015. The Cleveland-based industry market research organisation says that the drivers for this will be a higher rate of vehicle ownership worldwide, and longer distances travelled per vehicle. It also predicts that the value of global lubricants will grow faster than the volume, suggesting that the improving quality of lubricants will enable better sales of higher priced, premium lubes.
The global price of lubes, it believes, will rise by some 5.7% annually – more than double the volume growth rate. The study also says that lubricant demand will grow fastest in the Asia Pacific region, especially in the China market, whilst growth in Europe and North America will be well below the global average.
Other recent predictions by the Freedonia Group, specific to the markets in North America, were that the recent decline in demand for lubricants would be reversed through to 2010; increased manufacturing activity will fuel the demand for process oils; hydraulic fluids and greases; and an increasing motor vehicle parc will benefit engine oils and transmission fluids. Details of the Freedonia Group and its published studies can be found at Freedonia listing

Back to Top


5. Install the soothing new ‘Vital Link’ screen-saver from OATS



OATS has developed a ‘screen-saver’ version of its rotating cogs graphic illustrating the vital link that the company forms between OEMs and oil companies. The original cogs can be seen at www.oats.co.uk
Now, if you’d like to have a change of view on your own screen, you can download a free installer for most Windows operating systems. Click this link Installer pdf to view the pdf Installation Guide which also has the link to the screen-saver download file itself.

Back to Top


6. Ford raises US gasoline oil change interval and unveils new Mercon LV

Last year, Ford increased oil change intervals for diesel engines from 7,500 miles to 10,000 miles, under normal conditions. Now the company has extended its recommended gasoline engine oil change intervals from 5,000 miles to 7,500 miles, under normal use, for select new 2007 models – Ford Edge, Lincoln MKX and Lincoln MKZ – and for all new or redesigned models for 2008. The move is said to be in response to ‘improved engine oils and improved engines’, in particular the carmaker’s new 3.5-litre Duratec 35 V6 engine. The company says that a combination of the extended oil change interval, ‘fill for life’ automatic transmissions, and fuel filter design, could contribute to significant financial savings for the vehicle owner.
Ford has also just unveiled its new automatic transmission technologies. Mercon LV is intended to be a ‘fill-for-life’ product, and one that is designed to deliver key performance benefits from 2008 models, beginning with the Ford Focus, later this year. The company says that drain intervals with the product will be 150,000 miles for passenger cars and trucks that are in normal service. The Mercon LV package comes with changes to the licensing programme that are aimed at cutting costs for the transmission fluid branders and re-branders.

Back to Top


7. GM post Dexron-VI licensees list

According to General Motors, they have been so frequently contacted by people asking whether an automatic transmission fluid provider has a Dexron-VI licence, that the carmaker has decided to publish a list of approved sources on its website. Dexron-VI fluid first went into some 2006 model year cars and trucks with Hydra-Matic automatic transmissions, intended initially as factory-fill and then registered for service-fill. Commentators have suggested that the move by GM is more in the way of raising awareness of the product than fulfilling a need – since there are as yet relatively few vehicles that require the product. Nevertheless, GM intends to update the list each month; this will separate out companies that have a licence for the product from others who may make spurious claims on their labels or publicity. All Dexron-III (H) licences expired at the end of 2006, and GM points out that the product’s successor, Dexron-VI licensed fluids, can be used in all applications covered by the earlier Dexron specifications. For Hydra-Matic transmissions, the company will now only support the use of Dexron-VI fluids. The list of new product licensees is available at Dexron text document.

Back to Top


8. Lubes ‘n’ Greases to launch Europe, Middle East and Africa edition

In June 2007, LNG Publishing Company’s award-winning flagship publication Lubes ‘n’ Greases magazine is to launch an all-new edition written for, and about, the lubricants, base-stock and additives industries in Europe, the Middle East and Africa. Lubes ‘n’ Greases is a highly respected American publication, aimed at the lubricants industry worldwide and reporting on all types of transport and industrial lubricants and additives. The new edition claims to be the first independent source of news about the lubricants industry in these regions. The publishers say it will bring its traditionally high standards of reporting and analysis to ‘technological trends, shifting raw materials supplies, the impact of regulations and OEM specifications’ and will also ‘spotlight problems encountered by end-users and the solutions that meet their needs’. For more information, or to subscribe, visit www.lngeu.com
Subscriptions are free for qualified subscribers living in Africa, Europe or the Middle East. Paid subscriptions are available for other regions.

Back to Top


9. Oil companies post mixed first-quarter results

The major oil companies have been posting their 2007 first-quarter financial reports in the last few weeks. In many instances, total revenue was not as buoyant as previously, but net profits have improved. Here are some winners and losers.
BP saw its net profits fall by 17% to $4.66 billion, as its total revenue, at $62.04 billion, was 3% lower than for the same period last year.
ConocoPhillips’ net income rose by 7.7% to $3.55 billion, although its revenue fell by 12% to $41.3 billion.
ExxonMobil’s net income increased by 10% $9.28 billion, with refining and marketing adding 46% to make $1.9 billion.
Chevron saw a 12% reduction in total revenue for the period, down to $48.23 billion, but with a net income increase of 18% to £4.7 billion.
Fuchs Petrolub AG reported a 39% increase in net profits, up to $36.7 million. Although its sales improved in Europe and the Asia Pacific region, they declined by 14% in the Americas.
Imperial Oil’s net income rose by 31% to $774 million.
Marathon Oil made $13 billion in overall revenue – a 21% reduction, and a 9% drop to $717 million in its net income.
Lubrizol’s lubricants additive organisation saw its operating income jump by 36% to $101.4 million, and at the same time total revenues for the lubricants additive segment hit $696 million, an increase of 11% on last year’s first quarter. The company’s net income reached a record $71.6 million.
Petro-Canada earned $580 million, an increase of just over 19%, with net earnings up by 9% at $590 million.
Royal Dutch Shell’s sales overall fell by 3.3% but earnings rose by 5.7% to $7.28 billion.
In South Korea, SK Lubricants reported a 105% increase in its operating profit, to $73 million. It sold 43% more lubricants, to a value of $268.4 million.
The revenues of Total SA fell by 3% and its net profit dropped by 17%.
Lubricants blender Valvoline recorded a huge 1,020% hike in its operating income, to $22.4 million, and its sales and operating revenues increased by 8% to $382 million.

Back to Top


10. Singapore company Hyflux in Saudi lubes recycling project

The Singapore-based water treatment group Hyflux and the private financial management company Saudi Economic and Development Company (Sedco) are to each buy a stake in Lube Oil Refining Company (Lubrec) – a Saudi Arabian used oil collector and recycler that runs a recycling plant in Jeddah. Some 350,000 tons of lubricants were used in Saudi Arabia in 2006; currently more than 200,000 tons of used oil is collected, but the current re-refining capacity is only 80,000 tons. Hyflux and Sedco will each own 41.5% and Lubrec will own the remainder.
Some £45 million is to be invested in upgrading and running an existing Lubrec plant where used oil will be turned into a high-grade product. Hyflux will do this with the use of its environmentally-friendly, proprietary plasma membrane technology that does not use chemicals or additives – at what will be the first membrane-based oil recycling facility in Saudi Arabia. The project is to be spread over two phases; the first will be ready during the first half of 2008 and will enable the plant to process 24,000 tons of lube oil, and this will be doubled in phase two. They expect the cost of the recycled product to be between 60% and 80% of oil prices – around US $700/tonne. Hyflux has committed $100 million to recycling, and has developed recycling centres in Singapore, Bangalore in India, and in Beijing and Taizhou in China.

Back to Top


11. Komatsu opens second India plant for dump trucks
Near Chennai in India, Komatsu Ltd has opened a second production facility for manufacturing the large dump trucks that are used in the country’s mines. This is the result of a thriving economy in which India’s natural resources are playing a major part, particularly in the need for coal for thermal power generation, and the production of iron, copper, and other non-ferrous metals. This has meant that the mining industry has needed to modernise its operations, and, in the drive for new equipment, Komatsu anticipates an increasing requirement in the future for off-highway dump trucks and similar equipment. The company was formed in 1917, and has for many years been a prime mover in India’s mining industry, particularly with its bulldozers. Since 2005,Komatsu has been making dump trucks in China. Its plant in India shares its basic design concepts with that at Ibaraki in Pakistan, which opened in January 2007.

Back to Top


12. Chevron’s University gets STLE approval

Chevron’s Lubricants University www.lubricantsuniversity.com has been approved by The Society of Tribologists & Lubrication Engineers (STLE) as an Educational Partner. The Chevron programme is an on-line training and information resource for people in lubrication and maintenance markets, and serves the commercial on- and off-highway, construction, mining, and industrial industries. The website is a convenient, cost-saving and time-saving tool, and all courses carry a certificate on successful completion.
Both Chevron and STLE are leading sources of educational information on lubricant-related topics. A new example that has just come on-line at the Chevron University site is the free course ‘API CJ-4 Lubricants for 2007 Low Emission Diesel Engines’. This discusses the 2007 emission restrictions for nitrogen oxides and particulate, after-treatment emission control systems, and the CJ-4 category testing and benefits compared with CI-4 PLUS oils. Chevron has also announced it will now offer its ‘Fundamentals of Lubrication’ training course – the most popular course in its on-line portfolio – in Spanish. Details of the Lubricants University’s subscription programme can be requested from lublearn@chevron.com

Back to Top


13. New report on dual clutch transmission trends in Europe

In Europe, there will be a steady rise in the popularity of dual clutch transmissions. That is, according to a recent Frost and Sullivan analysis of transmission technologies in the region, described in the company’s publication Strategic Analysis of the European Market for Transmission Technologies. The report predicts that the share of automated manual transmissions and dual clutch transmissions is set to rise from some 5% of the market in 2005 to upwards of 22% by 2013. They say that the dual clutch share alone will increase by ten percentage points to 12% over the same period. Full information on the report can be found at F&S report

Back to Top


14. Bio-lubes company claims synthetic-like performance



In America, Renewable Lubricants Inc. has recently filed for eleven patents, and has 150 products on its list. The company, which launched in 1993, makes lubricants products from such renewable agricultural plant resources as soy, corn, canola, sunflower and other bio-materials that are grown specifically for them by a number of farmers. The Suffield, Ohio company – owned by Jacqueline and William Garnier – is creating new, green, ecologically-friendly, renewable lubricants in their 13,000 square-foot facility, using a bio-based technology that changes the natural plant oils into high performance vegetable lubricants that can withstand ‘the hottest engines and the cruellest, harshest, coldest winters’. The company slogan is ‘bio-based lubricants that perform like synthetics’, and users of them claim significant gains in fuel efficiency, and reductions in carbon deposits and emissions. For more information, visit www.renewablelube.com

Back to Top


15. CNOOC to open base-oil plant in China

China National Offshore Oil Company (CNOOC) has recently announced that it is about to open its first naphthenic base oil plant in China; this will be at Binzhou in the province of Shandong. Output is expected to be some 5,750 barrels per day. The company’s second naphthenic base oil plant, to be built in Zhanjiang in Guangdong province, is expected to open at the end of 2008. The other twenty-one base oil plants in China are operated by PetroChina and Sinopec.

Back to Top


16. Private equity in Allison moves

As we go to print, newspaper reports are widely predicting that the private equity firm Blackstone Group is at the centre of moves to buy Allison Transmissions, the Indianapolis-based General Motors subsidiary, whose future the company has been debating since the beginning of the year when it started to look for ‘strategic options’. Other interested parties are said to include Centrebridge Capital Partners and the Carlyle Group – also private equity firms. GM is staying tight-lipped on the matter, and would only tell reporters that the company was ‘talking to a number of investors’. The estimated cost of buying Allison is estimated at $3 billion.

Back to Top




Enquiries: If you would like information on any of OATS' services please follow this link, then click on 'Contact OATS' and fill in the Enquiry form. http://www.oats.co.uk

Subscribe: If this email has been forwarded to you and you would like to receive your own copy of the Bulletin please email your name and company details to: bulletin@oats.co.uk

Unsubscribe: if you do not wish to receive further correspondence from us, reply with the word unsubscribe in the subject line, or follow this link bulletin@oats.co.uk

OATS Ltd
701/702 Delta Business Park
Swindon
Wiltshire
SN5 7XS
United Kingdom

Telephone +44 (0) 1793 616138

All contents of this page © OATS Ltd. 2007 All rights reserved. www.oats.co.uk