Petrobras on Nov. 4 agreed to acquire Chevron Chile S.A.C., including a lubricant blending plant in Santiago with 15,900 cubic meters (14,000 metric tons) per year capacity, for $12 million. In a statement provided to Lube Report, Chevron said it expects the transaction to be completed in the fourth quarter of 2009.
The sale of our lubricant manufacturing operations in Chile to Petrobras is consistent with [Chevron] Global Lubricants strategy to focus its efforts and resources on markets that represent the strongest opportunity for sustainable profitability and future growth, the company stated. In Chile, Chevron supplies its Texaco and Chevron lubricants and greases to commercial and industrial markets, transportation markets and end consumers, through almost 150 distributors. Chevron-branded lubricants will continue to be handled through our third-party distributor.
In its announcement Thursday, Petrobras said it plans to use its Lubrax lubricant brand in Chile, where Chevron Chile holds a 6 percent share of the finished lubricant market. In February, company executives told LubesnGreases that Petrobras has a 9 percent share of Latin Americas 3.15-million-metric-ton per year market for lubricants.
Little Falls, N.J.-based consultancy Kline and Co., in its study, Global Lubricants, 2009: Market Analysis and Opportunities, estimated overall finished lubricant demand in Chile this year at 106,100 metric tons.
Copec, ExxonMobils marketing ally in the country, led Chiles finished lubes market in 2008 with a 44 percent share, followed by Shell at 29 percent; Chevron (7 percent); and BP (2 percent), George Morvey, project manager in Kline’s Petroleum and Energy practice, told Lube Report. The remaining 18 percent was shared by all others in the market, Morvey noted, including such suppliers as Luval, Repsol YPF, Total, LiquiMoly, Ipiranga and Petrobras.
The acquisition further consolidates Petrobras presence in Latin Americas fuel and lubricant distribution segment. In addition to Brazil, the Rio de Janeiro-based oil company already has operations in Argentina, Colombia, Paraguay, Chile and in Uruguay by means of a network of about 1,200 service stations. In August 2008, Petrobras announced an agreement to buy the distribution assets of Esso Chile Petrolera from ExxonMobil, including 230 service stations and aviation fuel outlets at 11 airports.
Jorge A. Manes, Latin American industry liaison manager for Infineum Brasil in Rio de Janeiro, provided an overview of the Latin American lubricant market at the ICIS Pan-American Base Oils & Lubricants Conference last December.
Chiles market is sophisticated, Manes noted, and a range of associations and government agencies work to assure that lube quality is fit for purpose and consumers are not misled. Thanks to a voluntary industry effort by the Asociacion de Productores de Lubricantes that set minimum standards beginning in 1993, lower-quality engine oils were driven from the market. On the heavy-duty side, API CD and lower grades accounted for less than 5 percent of Chiles market in 2008, and on the passenger car oil side, API SE and lower grades accounted for less than 2 percent.