ExxonMobil has agreed to sell its Augusta, Italy, refinery – including its 730,000 metric tons per year API Group I base oil plant – to Algerias national oil company, Sonatrach, the companies announced. The sale is expected to close by the end of 2018, subject to conditions and legal requirements.

Sonatrach said in its news release that the acquisition will help it meet Algerias demands for gasoline and diesel fuel.

ExxonMobil said it will enter into multi-year commercial and technology agreements with Sonatrach for refinery products, including Group I base stocks and waxes, and will continue to market base stocks and waxes from Augusta at current specifications.

The company said a dedicated transition team will ensure continuity of the business and prepare for a handover and continuation of manufacturing of ExxonMobil products.

Sonatrachs refineries include one operated by subsidiary Naftec in Arzew, Algeria. It has a base oil plant with capacity to make 180,000 t/y of Group I.

Modest Lube Growth Seen in Middle East

Finished lubricant demand in the Middle East is projected to grow at a compound annual rate of 1.4 percent over the next five years to nearly 1.8 million metric tons, with industrial lubricants accounting for most of increase, consultancy Kline & Co. predicted.

Kline estimated Middle East lubricant demand was about 1.4 million to 1.7 million tons in 2017. Of that, 500,000 to 600,000 tons was from the commercial automotive segment, 500,000 to 600,000 tons was industrial lubes and 400,000 to 500,000 tons was consumer automotive.

Iran is the largest market in this region, having the largest automotive parc of all the countries in the region, said Sushmita Dutta, a project manager in Klines Energy Practice. Also, Iran has a much larger industrial base compared to [Gulf Cooperation Council] countries. Saudi Arabia was second in consumption, Kline estimated, followed by the United Arab Emirates, Oman, Kuwait, Qatar and Bahrain.

Africa Process Oil Demand to Grow Rapidly

African process oil demand will outperform the global rate due to expected above-average increases in African manufacturing, said a new report by market research company Freedonia Group. Asia and the Middle East will also do well, while Western Europe and North America will underperform, it said.

Freedonia Group predicted global process oil demand will grow at an average of 1.4 percent per year to 7.2 million metric tons in 2021, driven by increased rubber consumption and population growth, among other factors. Process oils are used in a wide variety of industrial applications, such a tires, adhesives, printing inks, transformers and plastics.

Carmakers Face Stiff Emissions Fines

The transport sector creates as much carbon dioxide as power generation, but faces far harsher punitive fines, said a representative from the European Automobile Manufacturers Association at the Uniti Mineral Oil Technology Congress.

The transport sector as a whole contributes about a quarter of all CO2 emissions, roughly the same as the power generation sector, producing around 2.6 billion metric tons of CO2. Meanwhile, it costs around 245 billion per year for the transport sector to address that, making it one of the most expensive ways to reduce emissions, said Paul Greening, ACEAs emissions and fuels director, told delegates at the Uniti conference in Stuttgart.

The cost of reducing CO2 in the power generation, forestry and agriculture [sectors] is significantly lower, he said.

When we compare the progress of various sectors, we believe that the auto sector itself has been treated quite disproportionately, Greening continued.

Business

Vivo Energy PLCs initial public offering in London in May valued the company at $2.71 billion. Vivo Energy distributes Shell fuels and lubricants in 15 African countries.

United Arab Emirates-based petrochemicals company GP Global completed the acquisition of a majority stake in blending company MAG Lube LLC, also from the U.A.E. Italmatch Chemicals Group has agreed to acquire Afton Chemicals metalworking fluid business. The deal was expected to close by the end of May.

South Koreas SK Innovation shelved the listing of its wholly owned subsidiary SK Lubricants for a third time after the IPO failed to meet pricing expectations due to dampened foreign investor interest.

A move to new premises in Lancashire by U.K. additive company Brad-Chem has doubled manufacturing capacity, increased maximum stock holding by 50 percent and updated its laboratory.

Personnel

Uta Holzenkamp has become the new senior vice president of BASFs global fuel and lubricant solutions business unit. Kristiaan van Severen was hired by Kemat as product manager for polyisobutylenes. Oxea appointed Lars Eric Johansson as its new senior vice president of strategic alliances.