Lukoil Aims High in Europe


MOSCOW – Russias Lukoil has built a significant presence in several European lubricant markets and is now working to build up its business in several larger Central European countries, an official said during an industry event in November.

We are tasked to expand the presence of Lukoil oils in the European market, Yaroslav Litvintsev, executive director of the companys Europe operations, told RPIs Lubricants Russia conference held here Nov. 16-17. The focus is on Germany, Italy, Austria, Scandinavia and the markets of Eastern Europe.

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In Europe, Lukoil owns three lubricant manufacturing sites. In 2013, in Austria it acquired a 35,000 metric tons per year blending plant from the countrys energy giant, OMV. Later, the plants capacity was expanded to 80,000 t/y.

Along with the plant, Lukoil bought OMVs key lube brand Bixxol, and it took control of the Austrian companys distribution operations in Austria, the Czech Republic, Slovakia, Hungary, Slovenia, Serbia, Romania and Bulgaria. As a result, we hold almost 20 percent of the Austrian lubricants market at the moment, Litvintsev said.

Lukoils second European production site is a 40,000 t/y blend plant at a Ploiesti, Romania, fuel refinery. Lukoil also has a network of around 300 fuel stations in Romania. Finally, the Russian company operates a 35,000 t/y blend plant in the port city of Hamina, Finland. It also maintains sales offices in Sweden, Germany, the Czech Republic, Slovakia, Italy and Bulgaria. Litvintsev noted that Lukoil has its highest European lubricant sales volumes in the countries where it owns blending plants.

In 2014 Finlands lubricant demand was 65,000 tons, and Lukoil held 22 percent of the market, according to the company. Lukoil also claimed 20 percent of Austrias 67,000 ton market and 18 percent of Romanias 60,000 ton market. Litvintsev said the company expects its shares of the Finnish, Austrian and Romanian markets to rise to 27 percent, 24 percent and 30 percent, respectively, by 2020.

The company claims to hold 2.2 percent of Hungarys 64,000 t/y market; 1.1 percent of the 155,000 t/y Czech market; 1 percent of Slovakias 40,000 t/y market, and 0.6 percent of Slovenias 16,000 t/y market. Its goal is to hold 8 percent of the Hungarian market and 6 percent of the other three by 2020.

Lukoil also wants to expand in several of Europes larger markets, including Germany, Italy, Poland and Switzerland, which consumed 1.03 million tons, 430,000 tons, 220,000 tons and 60,000 tons, respectively, last year. The company wants to gain a 5 percent share of each of those markets by 2020, although it currently holds just 0.2 percent of the German and Swiss markets and has not yet established a presence in Italy or Poland.

Lukoil is among the top 10 global lubricant producers. In 2014 it produced 1.2 million tons of base oils and lubricants and supplied 40 percent of Russias 1.6 million ton demand for those products.

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