East Europe

Lukoil began operations in Eastern Europe in the late 1990s when it acquired a refinery owned by Romanias national oil company, Petrotel. With its wide range of products, including API Group I base oil, additives and finished lubricants, the petrochemical complex in Ploiesti was a major player in Romania and neighboring countries during the 1970s and 1980s.

However, in 1998, Petrotel was able to sell only 18,000 tons of base oils and lubricants, the lowest output ever, and the company decided to shut down its base oil production the next year. Then, Lukoil entered the picture and after acquiring the Ploiesti refinery, revamped the finished lubricant production plant.

Petrotel’s production was associated with good quality and affordable lubricants for industrial equipment and farming machinery, so we started from there, Maxim Donde, LLK International’s general director told Lubes’n’Greases in an interview in February. Now, Ploiestis finished lubricants are made from Group I and Group III base oils supplied by Lukoil’s Perm and Volgograd refineries in Russia.

During the early 2000s, the company actively developed its industrial oil production. [Responding to] the growing European lubricant demand that lasted until 2009, we decided to establish a highly effective production that would allow us to expand in Eastern European markets,” Donde said. In 2007, two years after the creation of LLK, Lukoil’s lube arm, the company spun off its East Europe lubricants daughter company to actively expand its reach in the region. The company started a modernization and development program at the Ploiesti lubricants blending and filling facilities.

In 2008, we finished the installation of 1-, 4- and 5-liter canister filling lines. Also we installed a 20-liter jerry can filling line, as well as a line to fill 60- and 180-kilogram barrels. In 2012, we started to fill 1,000-liter IBCs,” Donde said.

From 2009 to 2013, LLK constructed a fully automated blending plant, using French ABB-Cellier technology, which allows it to produce up to 40,000 tons of finished lubricants annually. We established a new base oil tank park, added equipment for automated heating that helps in the blending process, Donde explained. And we got rid of many obsolete and ineffective pieces of equipment, optimized workforce and energy costs, and increased production quality.”

Today, the Ploiesti blending plant supplies automotive lubricants for commercial vehicles and passenger cars, including engine and transmission oils, as well as agricultural and hydraulic lubes. The modernized blending plant also supplies industrial lubricants, including hydraulic, transmission and gear oils; turbine and compressor oils; agriculture lubricants; and railroad lubricants.

Donde noted that the Ploiesti facility is the only Lukoil Lubricants group lab in Europe qualified for REACH registration. Our lab is fully equipped to test the latest developed products that are certified for use in the EU,” he said, adding that the blending plant is the first Lukoil plant to supply the companys flagship line of Genesis-branded products.

The Ploiesti plant ships finished lubricants to many EU countries such as Hungary, Sweden, Italy, Czech Republic, Croatia, Greece and Cyprus. It also supplies the Romanian and neighboring markets of Serbia, Montenegro, Macedonia, Albania, Bulgaria and some Middle East countries. We are one of the biggest lubricant suppliers in Bulgaria, Donde said. Last year, we held 11 percent share of the country’s total lubricant market. Also, we are the leading industrial oil supplier in Romania and last year we held 19 percent of the country’s total industrial oil supply.

Central & Western Europe

A boost to LLKs lubricants business is coming from the markets of Central and Western Europe. In 2013, LLK bought the blending plant and lubricant operations of Austrian energy company OMV. In addition to the plant, LLK acquired OMVs distribution operations in Germany, Austria, the Czech Republic, Slovakia, Hungary, Slovenia, Serbia, Romania and Bulgaria. It also bought the rights to use OMVs Bixxol motor oil brand. Terms of the deal, cleared by the European Commission in January, were not disclosed.

The plant is located in Viennas Lobau area and has 80,000 t/y capacity, LLK confirmed. OMV developed the plant according to the newest standards and the blending process is fully automated. “The plant supplies around 25,000 t/y of finished products to several countries in Western, Central and Southeastern Europe,” Donde said.

In both Romania and Austria, LLKs main strategy is further development of its lubricant business in Europe, according to Lukoils president Vagit Alekperov. Last year after the deal was made public, he explained to the Russian media that the most significant factors that swayed its decision to buy the OMV operation were favorable geographic position in relation to foreign OEMs and enterprises, the developed distribution infrastructure in Europe, its modern industrial capacities, unique scientific know-how and extensive professional experience of the workforce.

The OMV and Romanian deals are also important for the Russian oil major because it can achieve synergies with LLKs Austrian operations and its operations in Romania; its 32,000 t/y plant in Hamina, Finland; and its 21,000 t/y plant in Izmir, Turkey. The [OMV] deal will optimize lubricant supply to our foreign partners, it can enhance Lukoils scientific and technical opportunities in new formulation development area, and it can provide sales growth, the company stated.