Last year oil major Lukoil retained the position of top lubricant marketer in Russia and held a 47 percent share of total Russian lubricant production, Sobolev said. Lukoil was followed by Rosneft, which held a 26 percent share. Two other major lube producers in Russia are Gazprom Neft, which held a 19 percent share, and Bashneft, which produced 8 percent of the countrys total lube production.

Finished Lubricants

InfoTek found that Russia produced 862,000 tons of finished lubricants in 2013. Last year motor oils accounted for 63 percent of the total finished lubes production while industrial oils held a 16 percent share. The rest goes to transformer oils (15 percent) and transmission oils (6 percent), Sobolev said.

In 2013 motor oils produced in Russia were consumed mostly by the automotive sector (23 percent of the total) and by tractor and agricultural machinery (50 percent). The shipping transportation and aviation sectors consumed 23 percent and 2 percent, respectively. These realized motor oil volumes dont correlate with the countrys motor oil demand, and they are substituted for by imports, Sobolev said. He noted that in developed countries, such as in Western Europe, motor oil demand for the automotive industry typically amounts to 45 to 46 percent of the total motor oil demand, while agricultural machinery holds 35 to 36 percent of the total motor oil demand.

The consultancy confirmed its November forecast on the Russian lubricants demand – it will stay sluggish at around 1.7 million tons per year over the next five years. The agency found that the automotive sector held the biggest share of the countrys 2013 total finished lubes consumption at 560,000 tons of motor oils consumed, followed by hydraulic oils with 155,000 tons consumed and transmission oils at 90,000 tons. The share of imports in these volumes is biggest in the motor oil niche, at 62 percent. The share of imports in hydraulic and transmission oils stood at 27 and 59 percent, respectively, Sobolev said.

Last year total finished lubricant imports into Russia stood at 495,000 tons, according to InfoTek.

It is indicative how big a role imports play in the passenger car motor oil consumption. In this market niche, imports account for a 72 percent share of total motor oil consumption, including a 95 percent share of high quality motor oils, Sobolev revealed.

On the other hand, the agency expects better results on the exports side. Base oil and lubricant exports from Russia could increase from 1.2 million tons in 2012 to 1.6 million tons by 2018.

In 2013 Russia produced 1.5 million tons of oils without additives. Of these, base oils (primarily API Group I base oils) accounted for 65 percent while 32 percent consisted of industrial oils (lower quality base oils without additives used by industry). Other oils accounted for three percent.

Tatnefts new Taneco refinery in Nizhnekamsk is expected to begin streaming Group II and III base oils in late 2014 or early 2015. At the moment the only company producing Group III base oil in Russia is Lukoil, which has 30,000 t/y Group III production capacity at its Volgograd refinery.

Additives

In 2013 Russia consumed 53,000 tons of lubricant additives, and its domestic additive production stood at 36,600 tons. Of this domestic additive production, the country exported 2,500 tons to other countries, Sobolev said.

The top three domestic producers were state oil major Rosneft, the LLK-Naftan Russo-Belarus joint venture, and independent additive manufacturer Qualitet. Last year Rosneft and LLK-Naftan accounted for 26 percent and 25 percent, respectively, of domestic additive production, while Qualitet held almost 20 percent of the total, according to InfoTek.

However, the quality of Russian additives is not sufficient for production of premium quality oils, Sobolev indicated, adding it is the reason why so much of the countrys additive consumption is based on imports.

In 2013 Russia imported 19,000 tons of additives. Infineum led with a 39.5 percent share, followed by Lubrizol at 27.8 percent, Afton with 16 percent, Evonik at 12.1 percent and Chevron Oronite at 4.5 percent.