Emirates National Oil Co. and Proserv Group will ramp-up lubricants blending in the growing Egyptian market after signing memorandums of understanding with local lubricant companies. Enoc Misr, a joint venture between Dubai-headquartered Enoc and Egypts Proserv Group, will use Egypt as an alternative supply option to neighboring countries and strengthen their combined presence in Egypt, the companies said in a press release last week. After Iran and Saudi Arabia, Egypt is the regions third-largest lubricant market. The Egyptian market is one of the largest in Africa, Enoc CEO Saif Humaid Al Falasi said in a statement. With a population of almost 100 million and an estimated growth rate of 2.2 percent comes a consistent increase in demand for lubricant products. Dubais Enoc is active in 60 markets spanning the Middle East, Indian subcontinent, South and Central Asia and Africa, the company claims. Proserv, which markets a portfolio of commercial, industrial and marine lubricants, said it is working in all 28 Egyptian administrative regions. But the companies have provided few clues as to the strategy they will pursue in establishing blending and manufacturing operations in Egypt or the investment levels. By deadline, Enoc through its public relations agency had not replied to questions over the JVs intentions. Analysts say the Enoc Misr JV could explore a number of options, including a new plant or contract manufacturing to achieve its goals. Dubais Enoc first inked the JV agreement with Proserv Egypt early last year, establishing Enoc Misr as its first on-the-ground operation targeting the lubricants sector in Egypt. Enoc Misr operates through a network of 40 local distributors marketing Egypt, Protec and Vulcan branded lubricants. Yet the joint venture faces stiff competition with Shell, ExxonMobil and Total combining to control more than 50 percent of the market, according to consultancy Kline & Co. Saudi Arabias Petromin Corp. also made major inroads during the past few years, garnering a share of more than 20 percent, Kline estimated. Despite erratic economic performance and political tensions, Egypt is increasingly recognized as an important lubricant market in the Middle East and North Africa region. Kline previously estimated the nations lubricant demand at 441,000 metric tons per year. The market still leans heavily on older technology. For example, monogrades such as SAE 50 and SAE 40 still comprise more than two-thirds of the heavy-duty diesel engine oils. Passenger car motor oils are gradually shifting towards multigrades, but SAE 20W-50 products still accounting for more than 60 percent of that category. Local base oil refiners supply between 65 and 75 percent of base oil demand, which is mostly API Group I oils. A spate of recent deals took place in Egypts energy sector, including an agreement between Chevron and Egyptian General Petroleum Corp. covering cooperation in petrochemicals, refining, transportation and distribution of petroleum products and crude oil. Egyptian General Petroleum regulates base oil production and distribution in the local Egyptian market. Still, Egypt is not immune to the impact of the global outbreak of the coronavirus, which may impact lubricant consumption amid a downturn in consumer sentiment and a depressed industrial sector. Fears over the economy could lead the central bank to cut interest rates in the wake of an inflation report due this week, London-based Capital Economics has said. Meanwhile, base oil prices are expected to come under renewed pressure, following the recent rout in crude and financial markets.