This operation has had an interesting and sometimes checkered past. Built in 1954, it initially operated under the name Buducnost, a small chemical workshop making products for the local part of what was then Yugoslavia. The product range was small and included goods such as shoe polish and greases.

Some years later, lubricant production was implemented at this plant, and the name Modrica appeared for the first time in 1957. In 1961 the lube plant was integrated with the nearby Brod refinery, and finished lubricants were first marketed under the Optima and Maxima brands. To provide raw materials for the lubricants, the Brod refinery began making base oils, as well as petroleum waxes.

Production at the plant increased quickly to around 60,000 metric tons per year of finished lubricants, with some 70,000 t/y of base oil being refined. The refinery appeared set to become a major force in Balkans lubricant markets – as a supplier both for in-house products and those blended by third parties.

However the outbreak of war in 1992 stymied further development of the refinery, located in what became the Republika Srpska, and considerable damage was done to the plant during the conflict. Such was the extent of the destruction that lubricant production fell to around 1,500 t/y.

After the end of hostilities in 1996, production was restarted with the new Bosnian Federation government taking a majority stake in the business, which operated under the Optima name. The structure remained unchanged until Russian interests arrived on the scene, buying around 75 percent of shares from investors and the government, and in 2008 the Modrica Refinery was once again making base oils and paraffin waxes.

The old brand name for finished lubricants, Optima, was revived to become the operating company. It is now 100 percent owned by NeftegazInKor, a subsidiary of Zarubeznjeft, a Moscow-based oil company owned by the Russian government. This corporation also runs the Brod Refinery and a distribution and petroleum retail company named Nestro Petrol. One of the principal aims of this entity is to become number one lubricants producer in Bosnia and Herzegovina and to expand into markets both locally and internationally.

The investment from NeftegazInKor funded (at least in part) a hydrocracker that allows the plant to make Group III oils. Modrica produces five viscosity grades installation of 3, 4, 5, 6 and 8 centiStoke. It is also considering adding a 10 cSt grade which would be the first of its kind in the European arena.

Perhaps the timing for the re-launch of the refinery was unfortunate since it coincided with the global economic crash that began in the second half of 2008. But such was the need for Group III oils that the plant was still able to find customers. Management says the company has also benefited from a dedication to constantly look for ways to improve its operations and customer offerings.

Although Modrica Refinery is land-locked, base oils in bulk can be transported by road and rail, as well as by river system. It is located near the Sava River, which flows into the Danube, providing access to Black Sea ports such as Constanta, Romania. From there the base oils can be shipped to other parts of Europe and also to deep-sea locations.

Recently base oils have been exported from the refinery using flexi-bags that are packed in shipping containers bound for receivers in the Middle East and Far East. This inventive approach and flexibility has enabled Optimas name to be promoted as an international brand of Group III base oils, whereas previously this name was only recognized in the Balkan regions.

Is is anticipated that the output from Modrica Refinery will once again rise to 60,000 tons, which is the maximum capacity given the plants current configuration. Officials say there has been some discussion of expansion but that any possible plan will be carefully evaluated to take account of market factors such as supply and demand for Group III.

Competition will become stronger as new sources are due to come on stream in the near future, but Modrica has several things going for it. One is that the lubricant blending plant gives it flexibility to modify operations, shifting base oil output between in-house consumption and sales to other companies as markets fluctuate. Having both domestic and international sales angles provides further options. The ability to adapt should help the company face challenges that are bound to arise.

Like many in Bosnia and Herzegovina, Modrica Oil Refinery has proved it is a survivor. This columnist would not bet against it continuing to be a player in the base oil market.