2017 marked the 10th anniversary of Chevron Lubricants importing shipments of API Group II to Europe from its plant in Richmond, California. Until then, there was only passing interest in the use of Group II on the continent, likely based on commercial observations of the United States and the transition away from Group l base stocks in that market.

Traditionally, Group l base oils had been central to all finished lubricant formulations. And with the help of the new Group III, which had been relatively recently added to Europe’s base oil slate, formulations continued to use Group l as a mainstay for blended products. Meanwhile, blenders regarded Group II as inferior to Group III because of its lower viscosity index.

At that time, Group III was recognized as a correction fluid to Group l, used alongside additive packages to enhance formulations in response to tightening industry and environmental specifications. However, with the lowering of automotive lubricant viscosities from 15W to 10W, then 5W and finally to 0W, the amount of Group III used in the formulation grew larger and therefore costlier, with the end result that finished lubricants meeting those higher specifications were becoming uneconomical.

Chevron thought that it was only a matter of time before emissions regulations and ACEA and European original equipment manufacturers demands for improved engine protection caused a shift away from Group I. By limiting sulfated ash, phosphorous and sulfur – known as SAPS – levels in automotive lubricant formulations, particulate emissions could begin to be controlled, but this process started to impinge on the use of Group l, which is inherently high in sulfur.

Amid these building pressures on the continued role of Group l as a mainstay, a number of producers decided to divest from or close Group I facilities, further increasing economic challenges for blenders and enhancing the possibilities for Group II to become the new dominant base oil in conjunction with Group III grades.

Chevron patented Isodewaxing, a wax removal process that enabled production of economically large quantities of Group II and Group III base stocks using the same technology. In due course, it was licensed to other major oil companies accompanied by advice on process and feedstocks to meet the standards required in producing these two types of base oil.

Around the third quarter of 2007, unaware of what was to come in the commodity markets and the global economy in 2008, Chevron was poised to make its final moves into Europe and beyond to spread the word about Group II base stocks and the flexibility they offered for the formulation of a new generation of automotive and industrial lubricants. The decisions to supply this market were well advanced, with plans to invest in a new facility in Pascagoula, Mississippi. In the meantime, Group II material could be supplied from Chevron’s facility at Richmond, which prior to engagement with customers would send quantities of base oils for testing and approval status.

Chevron’s plans were to engage with blenders, OEMs and additive companies to discuss the possibilities for Group II becoming part of the European base oil family. In order to achieve these objectives, Chevron embarked on presenting at conferences and spent millions of dollars gaining the necessary approvals from European additive companies. The other requirement was to construct a hub network that would create a supply chain for the imported material to reach end users. Perhaps the final and most significant part of the commitment was to invest U.S. $1.4 billion in building a new base oil plant at Pascagoula to supply U.S., European and other export markets. That plant came on stream in 2014.

This lead to a strategy to develop a globalized base oil business that used a single process to make uniform products. Around the time of Chevrons entry into the European market, the companys 50-50 joint venture with GS Holdings, GS Caltex, opened a Group II/III plant in Yeosu, South Korea. The three plants – Richmond, Pascagoula and Yeosu – constitute a world-wide system producing base oils to the same specifications and incorporated into the same global product slate. This system helped establish reliable back-up supply in times of high turnaround or unexpected outages.

The European base oil landscape is changing fast, as it has in surrounding regions such as the Middle East and Africa, which have typically been Group I markets. To take advantage of these changes, Chevron has added secondary supply hubs to shorten the supply chain and assist with customers managing the addition of another type of base oil to their slate. In Europe, Chevron now operates five hubs strategically located to serve the needs of lubricant blenders.

This is not the end of the story. The uses of Group II are not confined to the automotive sector, since they can offer advantages to some industrial lubricants, such as hydraulic oils – the largest category of industrial oils.

Chevron played a key role in the introduction and penetration of Group II base oils into Europe by bringing them to the market and obtaining approvals. It paved the way for other suppliers to follow and carved a niche in what promises to be an attractive and growing marketplace.

When Chevron entered the European arena back in 2007, there were doubts surrounding the future of Group II. There were few ACEA-approved automotive engine oil formulations using Group II and a skeptical market looking for proof of performance and added value in using these products. That may be in the past. ExxonMobil plans to commission a Group II plant in Rotterdam this year, which LubesnGreases estimates will have capacity of 1 million tons per year. Not far away, Luberef plans to begin making Group II at its plant in Yanbual Bahr, Saudi Arabia.

One Chevron spokesman said Group II is rapidly becoming the mainline base oil in Europe. Some would debate that, but theres no question that Europe now consumes a significant quantity of Group II and that demand is growing. Some thought that seemed unlikely when Chevron entered the market a decade ago.