Saudi Aramco Base Oil Co., known as Luberef, extended its land lease investment agreement for its Yanbu base oil facility by 20 years, according to a filing with the Saudi stock exchange. The renewal covers both the primary and secondary industrial zones at Yanbu Industrial City and carries a total cost of 116.12 million Saudi riyals (U.S. $36.96 million).
The extension supports Luberef’s long-term strategy to ensure operational continuity, enhance efficiency, and position the company for potential expansion and sustainable growth, according to a filing on the country’s stock exchange. It also keeps a production footprint on the Red Sea coast, where it supplies Group I and Group II base oils to regional and export markets.
The Yanbu refinery has capacity to produce 3,500 barrels per day of API Group I base oils and 14,200 b/d of Group II. Luberef also operates a base oil refinery in Jeddah, which produces 5,100 b/d of Group I base stocks.
Earlier in 2025, there had been speculation that the Jeddah unit might close, but the company later said it would remain operational, citing improved market conditions and stronger demand outlooks.
For the first half of 2025, Luberef posted net profits of SAR 466.70 million, down 13.22% from SAR 537.85 million a year earlier. in an earnings call, the company attributed the decline to lower margins and product price fluctuations in the global base oil market.
Luberef’s parent company, Saudi Aramco, continues to highlight lubricants and base oil production as part of its downstream diversification strategy.