In the past, most NOCs were content to be active in their own countries or home markets. Now, given a significant uptick in their financial results, the growing availability of in-house research and development and technology, the growing knowledge of global markets, and managers who have been educated and trained abroad, these companies are no longer satisfied with playing in their home markets. Many have been embarking on internationalization strategies for the profitable specialty segments of their businesses, such as lubricants. Thus, the lubes divisions of these companies are posing – and will continue to pose – more of a threat and challenge to the select few companies that lead the global industry, the Super Majors.

Within the oil industry, it is generally recognized that there are six Super Majors: BP, Chevron, ConocoPhillips, ExxonMobil, Royal Dutch Shell and Total. In terms of lubricants, five of those companies – ConocoPhillips is omitted – are the top five suppliers in the world by market share. Together, the six Super Majors accounted for more than 40 percent of the global finished lubricant market share in 2010.

In Europe, Africa and the Middle East, the Super Majors account for close to 50 percent of the lubricants segment. There is no doubt that these six are strong and are aggressively pushing market share, but NOCs are posing a growing threat, typically in one or more country markets and one or more regions, though rarely on a global scale. NOCs can be competitors to the Super Majors across all three lines of business – consumer automotive, commercial automotive and industrial lubes – or in a single line of business or specialized market segment, for example in metalworking fluids or food-grade lubricants.

The majors face the same kind of threat from some private but independent lube marketers. (Here independent refers to companies that do not refine base stocks.) Some of the key independents and NOCs active in Europe, Africa and the Middle East include but are not limited to Adnoc and Emarat (both based in the United Arab Emirates), Coop and Misr (Egypt), Engen (South Africa), Eni (Italy), Fuchs (Germany), Galp (Portugal), Gazprom and Lukoil (Russia), Grupa Lotos (Poland), Petromin (Saudi Arabia), Q8 (Kuwait) and Repsol (Spain).

These companies have been active in the lubricants industry in their homelands for a long time. However, many NOCs and independents are now growing in ambition and have the wherewithal to compete in other markets, be they neighboring countries or more distant. Eni, which is controlled by the Italian government, is a good example of an expanding NOC. In 2007, it agreed to acquire ExxonMobils lubricants business in the Czech Republic, Slovakia, and Hungary, and in the same year, it contracted with Apar Industries to launch Enis Agip brand in India. By the end of 2011, Eni will be represented by licensees and have local production in Argentina, Brazil, and Venezuela as well.

Fuchs is a strong example of an expanding independent. Headquartered in Mannheim, Germany, this company is now active in most of the worlds important lubricant-consuming countries. In December, Fuchs announced the completion and opening of its lubricant blending plant near Mumbai, India. Two months earlier, it took over Shells food grade lubricant brand Cassida. In October 2009, it opened a grease factory in Australia, and in 2008 the company acquired MS Fluid Technologies, of the United States, to strengthen its position in the metal forming market. As of 2010, Fuchs was one of the top 10 global lubricants suppliers.

Or consider Q8, the international arm of state-owned Kuwait Petroleum Corp. It entered Western Europe in the 1980s, and its lubricants business has a significant presence in several of the regions countries. It is now in the midst of a major expansion and upgrade of its blending plant in Antwerp, which will become one of the largest in Europe.

These companies are not succeeding merely on ability to purchase other businesses opportunistically, though the recent recession created ample acquisition opportunities. Many of these players are backwardly integrated and have the latest lubricant technology available to them. They also have great relationships and alliances with their domestic automotive OEMs and industrial OEMs. As these OEMs expand their own international reach, the lubricant marketers who supply them benefit as well.

Their product slate has improved significantly, with many of the players marketing a sophisticated line of products in the full synthetic, synthetic blend, and conventional product categories. Additionally, they are able to attract brilliant minds to their work force that are keen on taking their brands to the growth markets.

Clearly, the Super Majors have advantages over many of these NOCs and independents, including better infrastructure, global brand recognition, economies of scale and buying power, and the ability to supply large clients globally. The Super Majors can also supply both fuels and lubes, which some independents cannot. The key message to the Super Majors is that their leadership is expected to be challenged by some of the ambitious NOCs and independents not only in the latters home markets but also in many of the worlds prized lubricant markets. And this time, they come fortified with high performance products, backed by strong technical service, aggressive work forces, and in many cases the financial backings of their respective governments.

The Super Majors have dealt with upstart competition in the past and will surely create plans to respond to this emerging threat from the NOCs and independents. Who will come out stronger, only time will tell.