Shell said in February it had received an offer from Indian conglomerate Essar to buy Shells refinery in Stanlow, United Kingdom, for 250 million. As a result, the companies decided to negotiate exclusively with each other to try to reach an agreement by 1 April.

The Stanlow refinery includes an API Group I base oil plant with capacity of 260,000 metric tons per year.

Essar took an optimistic stance, saying it expected to close during the second half of this year. It added that a sale would include a stipulation for Essar to sell base oils back to Shell. It was not known how long such a clause would last.

The offer does not include the lubricant oils blending plant and does not impact the finished lubricants, process oils, base oils and waxes we sell, a Shell spokesperson stated. The U.K. is a very important market, and Shell Lubricants products will continue to be marketed in the United Kingdom.

Shell has divested several refineries with base oil plants in recent years as part of a broader strategy to streamline assets.

Berkshire Hathaway Buys Lubrizol

U.S. investment firm Berkshire Hathaway agreed in March to a U.S. $9.7 billion (6.9 billion) acquisition of Lubrizol Corp., the worlds biggest lubricant additive supplier.

Warren Buffett, chief executive officer of U.S.-based Berkshire, said it would take a hands-off approach to owning Lubrizol, which is headquartered in Wickliffe, Ohio, United States.

Lubrizol is exactly the sort of company with which we love to partner – the global leader in several market applications run by a talented CEO, James Hambrick, Buffett said. Our only instruction to James – just keep doing for us what you have done so successfully for your shareholders.

Lubrizols existing management said the deal will help the business by freeing it from the quarter-to-quarter pressure to satisfy public stockholders.

The transaction is subject to closing conditions and approval by Lubrizols shareholders, but is expected to be completed during the third quarter of this year. According to the companies, the price represents a 28 percent premium over Lubrizols $105.44 closing price on March 11 and is also 18 percent higher than Lubrizols all-time high share closing price.

Geeta Agashe, vice president of consultancy Kline and Co.s energy research practice, said Lubrizol is a solid company that has enjoyed steady, profitable growth over the years.

Even though theyve been doing well, historically, the stock has sold at a lower-than-industry level of pricing, Agashe told Lube Report. These sorts of under-valued companies are appealing to Mr. Warren Buffett. She added that there should be no anti-trust issues because Berkshire Hathaway is not a chemical company.

This is a good deal for Lubrizol ownership, Agashe continued, and a good one for Berkshire as well, as Berkshire now has gotten into an industry that is exercising control in the value chain and that has significant barriers to entry. This acquisition is going to make it difficult for competitors as well as consultants to understand how Lubrizol is faring, as their performance will not be as apparent as it was when Lubrizol was a publicly listed company.

Luberef Plans Group II Upgrade

Luberef plans to add 700,000 t/y of Group II capacity to its base oil plant in Yanbual Bahr, Saudi Arabia. The project, which will also double the plants bright stock capacity, is designed to be completed by 2015 and to cost 700 million.

Headquartered in Jeddah, Luberef owns two base oil plants in Saudi Arabia, both of which make Group I stocks. The Yanbual Bahr plant has capacity of 280,000 t/y, while a second plant in Jeddah has capacity of 260,000 t/y.

Its Group II, with flexibility for Group III if the market requires it, Sulaiman Bilaus, Luberefs vice president of manufacturing, said of the expansion.

Formally named Saudi Aramco Lubricating Oil Refining Co., Luberef is a 70-30 joint venture between state-owned Saudi Aramco, the worlds largest oil producer, and Jadwa Investment, of Riyadh, Saudi Arabia.

IPIC to Take Over Cepsa

International Petroleum Investment Co. in March launched a public takeover bid for all of Cepsas share capital, including Totals 49 percent stake, in a 4 billion deal. IPIC already has a 47 percent share in the Spanish refiner and lubricants marketer.

Other smaller shareholders account for about 4 percent, which will also be acquired by IPIC. The transaction is subject to government approvals.

The previous month Cepsa agreed to acquire Chevrons automotive and industrial lubricants, fuels and aviation businesses in Spain.

The Abu Dhabi government formed IPIC in 1984, giving it a mandate to invest in the energy sector globally. IPIC has stakes in 14 energy companies.

Madrid-based Cepsa is the second-largest lubricant supplier in Iberia and owns a 200,000 t/y Group I base oil plant in San Roque, Spain, near Gibraltar.

BP Selling Duckhams, Veedol

BP said in February it would try to sell its Duckhams and Veedol lubricant brands, both of which date to the early 20th century.

The buyer will get global rights to a portfolio of registered trademarks for the respective master brand along with associated product sub-brands and iconic logos. BP said it would not include any sales or customer lists, product formulation or rights or commitment for supply or other operational support.

London-based BP set a mid-March deadline to register expressions of interest from potential buyers. The company expected any purchase deal to be completed by the end of 2011.

Duckhams had an early relationship with the Morris and Wolseley car manufacturers in the United Kingdom, dating back to the invention of the combustion engine. It eventually led to development of Europes first multi-grade engine oil, known as Q. Duckhams also had a long standing history with motorsports.

According to BP, Veedol was the motor oil chosen by Henry Ford to lubricate the worlds first mass-produced car, the Model T. It was also used to lubricate Germanys Graf Zeppelin airship in the 1930s.

General Petroleum Opens U.A.E. Plant

Germany-based lube marketer General Petroleum in February opened a lubricant blending plant in Sharjah, United Arab Emirates, with capacity of 150,000 t/y. Officials expressed high hopes for the project despite the fact that blending capacity in the U.A.E. is already 10 times domestic demand.

We think the market clearly has room for more capacity, General Manager M.B. Menon said. The U.A.E. has a good business environment and is well-positioned for exporting to other countries. And thats what will happen with much of our output.

This is General Petroleums first blending plant. Until now it has contracted others to make its products. It plans to build a second plant in Tanzania. The Sharjah plant will make a full range of automotive and industrial lubricating oils but no greases, Menon said. Some will be marketed domestically, but a larger amount will be exported to Africa and the Asia-Pacific region.

Oxea Plans Ester Expansions

German chemical maker Oxea said it will build an additional specialty ester production unit at its manufacturing plant inOberhausen, Germany. The new unit is scheduled to come online during the second quarter of this year. The company said it also plans a further expansion with another new unit due in the second half of 2012.

Oxea did not disclose the size or cost of either project but said the first expansion will increase its specialty ester capacity by 40 percent. Officials said the company is taking actions to meet new demand from the plastics industry and to accommodate growing demand from existing customers.

Oxea sells its esters to the lubricants industry and for other applications such as coatings, cosmetics, pharmaceuticals and inks.

Nami-Khim Loses Long-time Chief

Boris Bunakov, the long-time head of Russian automotive engine research institute Nami-Khim, died 15 January. He was 72. Bunakov headed Nami-Khim since 1993 and was employed there a total of 46 years. Working in the field of automotive tribology, he developed motor oil test methods, several bench tests and motor oil test equipment.

He was also a president of the fuels and lubricants committee at Russias Association of Automotive Engineers. In recent years he was very visible at industry conferences in Russia, making impassioned comments both as a speaker and audience member about the problems facing his countrys lubricants industry and steps he thought it should take.