No question that ExxonMobil is a big supplier of base oil to the lubricants industry. The company controls nearly one of every six barrels of mineral base oil capacity worldwide. It is nearly twice the size of the second-place supplier. It owns four of the 10 largest base oil plants on the planet.
These facts and others were gleaned from LubesnGreases 2005 Guide to Global Base Oil Refining, a 22-by-33-inch wall chart. Developed in cooperation with British consulting firm Pathmaster Marketing Ltd., the guide gives a broad view of the global market, showing who makes mineral base oils, where, in what volumes and in what grades. Mailed last week to the magazines U.S. and Canadian print-edition subscribers and to paid international subscribers, it includes data on 152 plants on six continents.
ExxonMobil gained its dominant position when Exxon and Mobil merged in 2000, but its capacity has continued to swell since that time. It has undertaken significant expansions and/or upgrades at numerous plants.
The U.S. based energy giant refines base oil at nine wholly owned plants and four joint ventures, plus two plants operated by Canadas Imperial Oil, of which ExxonMobil owns 70 percent. Add it all up and the company has capacity to make 150,000 barrels per day – slightly more than 16 percent of the worlds total.
ExxonMobil wants to dominate in base oils, said R. David Whitby, chief executive of Surrey, U.K., based Pathmaster. They get the economics right, they get the scale right, and they make certain that they are the most efficient producer. Thats why they are recognized as the benchmark producer for the industry.
The worlds No. 2 base oil refiner is Royal Dutch/Shell Group. Shell is no slacker in the output department, either, with 78,500 b/d of capacity at eight wholly owned plants and five joint ventures, the guide indicates.
Shell has closed several old plants in recent years, and plans to close a 5,060 b/d facility in Hamburg, Germany, by the end of this year. At the same time, it is investing in two large projects, both joint ventures. The first is the Port Arthur, Texas, plant owned by Motiva, Shells 50/50 partnership with Saudi Refining Inc.; it is in the midst of an expansion that will add another 15,000 b/d in January. Shell also has entered a Gas-to-Liquids joint venture with Qatar that includes a 9,600 b/d base oil plant, scheduled to be completed in 2009.
The worlds third- and fourth-largest base oil suppliers are national oil companies PetroChina (with 12 plants in China totalling 60,500 b/d), and Petroleos de Venezuela S.A. The latter owns two plants in Venezuela and one in the Netherlands Antilles, while its U.S. subsidiary Citgo owns one U.S. plant and a share in another. When you include its equity interest in Nynas, a 50/50 joint venture with Norways Statoil, PDVSAs global capacity climbs to 40,500 b/d.
Fifth-place Lukoil operates three Russian plants in which it owns controlling shares. S-Oil owns just one plant – in Onsan, South Korea – but the 24,500 b/d facility is large enough to earn a No. 6 ranking. Chinas other major state-owned refiner, Sinopec, has six domestic plants, while Brazils Petrobras has three in its homeland and one in Bolivia. U.S. based Chevron owns one plant each in California and Australia and is part of a joint venture in South Africa. S.K. Corp. closes out the Top 10 with a plant in South Korea.
LubesnGreases guide also pinpoints geographic trends in base oil manufacturing. With 29 percent of the worlds total, Asia-Pacific has more capacity than any other region, led by China with its 83,500 b/d of capacity. Japan and Korea together boast nearly 94,000 b/d, more than half of it for manufacturing highly refined Group II and Group III stocks. And Singapore is an Asian base oil powerhouse, with 38,000 b/d of capacity, most of it held by – no surprise – ExxonMobil.
With 231,000 b/d of total capacity, North America continues to stride from Group I toward Group II stocks, and over half its paraffinic refining capacity now is dedicated to making Group II. Western Europe, with 158,000 b/d of current capacity, is also trading Group I supply for more highly refined grades. Closure of a Shell plant in Hamburg, Germany, and BPs Coryton, U.K., facility will remove 15,360 b/d of Group I capacity this year, but expansions by Neste and Total will add 11,000 b/d of Group III by 2006.
Still lagging in the race to upgrade is Central/Eastern Europe, including the former Soviet Union. The region actually is losing capacity, and sharp drops have been reported at a number of plants – though some observers say the decline stems from production trains that stopped operating years ago.
The Middle East also has been slow off the blocks in the race to upgrade, the guide reveals: All of its capacity is Group I. But it is a hotbed of announced projects. Besides Shell, Sasol Chevron has entered a joint venture with Qatar for a GTL project that includes a base oil plant. And ExxonMobil is in the thick of things, too, with its own GTL joint venture with the government of Qatar that includes 30,800 b/d of base oil capacity, due on stream in 2011. If completed, the three projects soon will turn the tiny nation into the biggest exporter of high-quality stocks.
“The 2005 Guide to Global Base Oil Refining is a terrific resource for the worldwide lubricants industry,” said Nancy DeMarco, Lubes’n’Greases publisher. “It’s a valuable tool for base oil buyers and base oil suppliers.” The Guide was mailed to U.S. and Canadian subscribersto the print edition of LubesnGreases, and to paid international subscribers, along with the June issue of the magazine. Additional copies are available; for information, visit http://www.LNGpublishing.com/base.htm.