Creation of such a testing center would mean a way out of the dead end where the countrys lubricants industry is heading now, Sobolev said. We should put this as a high priority to the relevant government bodies and oil institutes because the nonexistence of such a center radically slows down the countys lubricants industry development.

With 3 million tons of total lubricants production capacity, and total annual output of 2.5 million tons, Russia is worlds third largest lubricants producer after the United States (10 million tons) and China (8 million tons), Sobolev noted. However, poor quality requires Russia to export its surplus as a material that is further processed by different modern technological processes to be more suitable for blending good quality products, he declared.

For Russia these are problematic numbers. Compared to the lubricants production in Italy or Germany, where they produce almost as much as they consume, Russia consumes around 1.5 million tons of lubricants annually and exports around 1.4 million tons, Sobolev said.
He added that Russia imports about 400,000 tons of high-quality lubricants.

Old plants still have to run, and workers and tech personnel collectives still have to be paid for their job, he said, adding the price for maintaining the status quo is the poor quality of base oil that results. Low export duties allow factory management to easily sell these oils with low prices.

Poor quality results from Russias use of obsolete technologies for base oil production that date back from 1950s and 1960s, which can produce only [API] Group I base oils, the analyst noted. High quality base oils and fuels in Russia today are produced on Western-made equipment.

The Moscow-based All Russia Research Institute of Oil Refining (VNII NP) and NAMI-Khim, automotive engine research institute, both recently sent an urgent letter to the government to help establish a modern lubes and additives testing center, Sobolev reported.
The problem of antiquated equipment extends to fuel production as well, he added.

Lukoil, Russias biggest base oil producer, in 2011 produced around half of countrys total production, or 1.25 million tons. Other major lubricants producers include Rosneft, Gazprom Neft, TNK-BP and Tatneft. Tatnefts oil major subsidiary, Taneco, is developing a base oil plant in Nizhnekamsk which promises to yield 100,000 tons of Group III base oil when it begins to stream by the end of next year. Lukoil, at its Volgograd base oil plant, Gazprom Neft at its Omsk refinery, Slavneft in Yaroslavl and Bashneft in Ufa also are undertaking major upgrades.

All these projects bode well for the production of high quality base oils in Russia. But there are some base oil and lubricants plants in critical condition that soon might be closed, Sobolev said. He cited the Group I base oil plant in Orsk that supplies low quality feedstock for the Orenburg greases, lubricants and coolants plant. The second is at Novo Ufimsk refinery that produces very low quality motor and transmission oils and specialty fluids.

In 2011, Russia produced 660,000 tons of engine oils. The same segment imported 300,000 tons. Generally, we produce oils for old equipment, like tractors, Lada passenger cars and Kamaz heavy-duty trucks that use obsolete Euro 1 and Euro 2 fuel specification standards, Sobolev observed, adding high quality imported vehicles and equipment are mainly operated with imported engine oils.

In 2011, Russia produced 620,000 tons of industrial oils. By contrast, Russian blenders produced only 14,000 tons of high quality industrial oils, while 30,000 tons were imported for modern equipment used in the industrial sector, according to Sobolev.

The additives sector also needs to improve its production process, Sobolev said. In 2011, the country consumed 55,000 tons of additives, while around 20,000 tons were imported. The rest was made in Russia. High quality additives are needed because operational demands for new lubricants are becoming stricter every year. Additives for premium quality oils are not produced in Russia, but imported, he said, adding that the situation with the industrial oil additives is especially grim.
Production of industrial oil additives in Russia is literally not developed at all. It is true that we can find some producers with a good portfolio of additives packages for engine oils, but that is not the case for industrial additives, especially those for engine oils for machinery operating in extreme climate conditions, he said.

Some ask why Russia needs to develop additives production when it consumes them in small volumes. I believe that nonexistence of high quality additives production is also slowing the development of countrys lubricants industry, Sobolev concluded.