Rosneft, Avtovaz Team Up on Lubes

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Rosneft and Russian automaker Avtovaz signed a fuels and lubricants procurement contract that could lead to development of new lubricants in Russia.

Financial terms were not disclosed. The agreement envisages long-term cooperation in supply of motor oils, petrol and diesel fuel, as well as development of new lubricants, state-owned oil major Rosneft said.

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Rosneft President Eduard Khudainatov and Avtovaz President Igor Komarov signed the deal. Rosneft and Avtovaz are joining forces to develop both companies research and production potential, Khudainatov said. Rosnefts oils and additives plant at its Novokuibyshevsk refinery is getting ready to launch a new line of premium lubes. These lubes can meet the car manufacturers latest requirements, he noted.

Based in Togliatti, Samara oblast, Avtovaz expressed confidence that the partnership with Moscow-based Rosneft will support development of the Russian lubricants and additives market. It will also increase the companys production efficiency and boost the quality of its produced vehicles and equipment. The resulting economic effect will allow us to provide additional support to the city, where our plant is based, said Avtovazs Komarov.

Togliatti is one of Russias biggest car manufacturing centers, located 130 kilometers away from Novokiubyshevsk, a distance considered relatively small in Russia. After Lukoil, Rosneft is the second biggest lubricants marketer in the country. In 2010 it held an 18 percent share of the Russian automotive lubricants market.

Moscow-based Rosneft is the biggest oil producer in Russia. In 2011, it produced 122.6 million metric tons of crude oil while its refineries processed 57.9 million tons of oil. The company is currently implementing a large-scale modernization program of its refineries and base oil plants with an investment of 168 billion rubles (U.S. $5.7 billion) in 2012 alone.

Avtovaz is one of Europe’s biggest carmakers. Its current production capacity stands at approximately 800,000 vehicles per year. Since 1970 Avtovaz has produced more than 26 million Lada cars.

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