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Petrobras Divests Abroad
Ongoing financial trouble has led Brazils state-owned oil company Petrobras to divest all of its assets in Petrobras Chile Dist­ribution to private-equity firm Southern Cross Group, for $464 million. The Chilean operations included a blending plant in Santiago, 279 service stations and eight distribution terminals. The blend plant had capacity of 14,000 metric tons per year when Petrobras acquired it from Chevron Chile in 2009.
Petrobras also divested its 67.19 percent stake in Petrobras Argentina to local energy company Pampa Energia for $897 million. The Argentine unit had both upstream and downstream operations, and sold products including lubricants, petrochemicals, fuels and asphalts. Its assets include a lube oil manufacturing plant, a laboratory and a distribution center for Petrobras Lubrax-brand products, all based in the city of Avellaneda, in Buenos Aires province.
Ashland Outlines Valvoline IPO
As part of its spin-off of Valvoline Inc., Ashland hopes to raise up to $690 million in an initial public stock offering that constitutes at least a 15 percent stake in the new company.
The IPO on the New York Stock Exchange would put up at least 30 million shares of common stock, with an additional 4.5 million shares available in case of over-allotments. Ashland would retain 170 million shares of Lexington, Kentucky-based Valvoline. We expect the public offering price to be between $20 and $23 per share, Ashland noted in the registration statement.
The IPO prospectus indicates that after the completion of the IPO, Ashland will continue to control a majority of the voting power of Valvolines common stock. As a result, Valvoline would be a controlled company within the meaning of the NYSE listing standards.
Ashland filed its registration statement with the U.S. Securities and Exchange Commission for the proposed IPO on Sept. 12, about a year after announcing the spin-off.
Covington, Kentucky-based Ashland said Valvolines business and growth strategy included growing and strengthening its quick lube network and accelerating international growth across key markets, citing primary targets such as China, India and select countries in Latin America, including Mexico.
For fiscal 2015, Valvoline generated $2 billion in sales, and $196 million in net income, according to the prospectus.
BRB Opens Singapore Plant
BRB International opened its new viscosity index improver plant in Singapore through Viscotech Asia Pte., its joint venture with Ban Guan Chemical. The Dutch lube additives supplier formed BRB Viscotech Asia as a way to expand in the region while freeing capacity at the companys existing viscosity modifier plant in Duisburg, Germany. BRB owns 65 percent of the joint venture and Ban Guan, a subsidiary of Singaporean engineering firm Malayan Daching Co., owns the other 35 percent.
For our lube oil additives and chemicals division, this is the first production joint venture in Asia and it offers the opportunity for BRB to increase its flexibility in supply and a basis for future expansion, whilst being closer to our growing Asian customer base, BRB said in a statement.
The Singapore plant, which has production capacity equivalent to the one in Germany, will manufacture liquid viscosity modifiers marketed under the Viscotech brand. Viscosity modifiers are used in multigrade engine oils, gear oils, automatic transmission fluids, greases and various hydraulic fluids.
Chevron Ships Down Under
Chevron will market API Group II base oils through a distribution agreement with Caltex Australia, joining the growing number of companies supplying highly refined base stocks in the country. Caltex Australia will distribute the 100, 150, 220 and 600 neutral base oils, which come primarily from Richmond, California; Chevrons joint venture plant in Yeosu, South Korea; and from storage in Singapore.
Output from Richmond and Yeosu, as well as Chevrons refinery in Pascagoula, Mississippi, are all fungible, said a company representative, noting that the company can supply Australia from alternate points, for example, during a turnaround at one of its plants.
There is no local production of virgin base oils in Australia, although it has some rerefining. Caltex shut down the countrys sole surviving Group I refinery (in Kurnell, just outside of Sydney) in 2011, while BP, ExxonMobil and Royal Dutch Shell ceased base oil production there between 2002 and 2004.
Fakes Found in Russia, Africa
Russian police shut down a business in an old warehouse in Togliatti, Samara Oblast, early last month that allegedly manufactured counterfeit motor oils of popular brands. Investigators with the Ministry of Internal Affairs for Togliatti said the facility unlawfully manufactured and sold fake lubricants worth $13,000 (800,000 rubles). Russian police reported that the suspected organizers filled and labeled plastic canisters with popular motor oil brand names. The police also discovered a cache of 200-liter barrels and intermediate bulk containers.
Elsewhere, the Tanzanian Bureau of Standards shut down a lubricants manufacturer and confiscated substandard, counterfeit lubricants from distributors as a result of market surveillance and inspection efforts in the African countrys Ilala and Temeke districts. TBS Public Relations Officer Rhoida Andusamile confirmed that the bureau seized 21,587 liters of lubricating oil from distributors and shut down Temeke Battery and Lubricants for manufacturing substandard, counterfeit products.
Elevance Sells Natchez Plant
Elevance Renewable Sciences has sold its 310,000 tons per year Natchez biorefinery, which the company had long intended to convert to a biolubricants plant, to World Energy. World Energy had been operating the Mississippi facility since early 2013 as a certified biodiesel refinery, pending the conversion.
Elevance has built and operates a biorefinery in Gresik, Indonesia, in cooperation with partner Wilmar International, which can make about 400,000 t/y of renewable chemicals such as C10 linear olefins and methyl esters from refined palm oil and palm olein. The chemicals are used in making base oils, cleaning ingredients and personal care products.
Japans Giants Set the Date
JX Holdings and TonenGeneral Sekiyu KK will merge in April 2017 to become Japans largest oil refiner. The new entity, JXTG Holdings Inc., will see TonenGeneral delisted and absorbed by JX subsidiary, JX Nippon Oil & Energy. The firms shareholders will meet Dec. 21 to approve the integration, which is also subject to the scrutiny of the Japan Fair Trade Commission and other regulators.
JX Holdings has three base oil plants in Japan and claims about 32 percent of the countrys finished lube market. It manufactures automotive and industrial lubricants under its Eneos brand. TonenGeneral produces base oil at its Wakayama refinery and holds approximately 8 percent of domestic finished lube sales, marketed under ExxonMobils Mobil brand. Both companies plan to continue marketing products under their respective brands after the merger. The two did not comment on plans for their respective base oil units, but noted that some of their manufacturing bases across various segments would be combined or closed.
Japans other two oil majors, Idemitsu Kosan and Showa Shell Sekiyu, are also negotiating a tie-up.
Beauty in a Bottle
Kawasaki aims to stand out in Indonesias increasingly competitive lubricant market by selling some of its motor oils in transparent containers designed to look like high-end perfume.
The Japanese vehicle manufacturer has launched the glam packaging for its fully synthetic SAE 10W-40 four-stroke motorcycle oil, Lam Lye Ching reported in the Sept. 6 issue of Lube Report Asia. The oil, 4T Ultimate, comes in a gold-trimmed, black cardboard box which holds a slim, cylindrical 1-liter clear plastic bottle – similar in aesthetic to some premium perfumes sold in the country. The lubricant sells for 92,000 rupiah ($7), and previously had a black, opaque plastic bottle.
The plastic container of the motor oil is transparent and is the only lubricant product in Indonesia to use this concept, Morrit Widyawan, supervisor of PT Kawasaki Motor Indonesias spare parts department, said in a telephone interview. We collaborated with our blender, Idemitsu, and our staff at Kawasaki Motor Indonesia thought of the design, he added. It appeals to the consumers, many of whom believe that a clear lubricant looking like pure oil is preferred. It also helps prevent counterfeits because most of the time, counterfeit lubricants are darker.
Sri Lanka Cracks Down
The Cabinet of Sri Lanka in late August authorized the countrys Public Utilities Commission to act as regulator of its lubricants industry, part of the governments broader efforts to overhaul management of the domestic market. The utility commission previously served as a shadow regulator, advising government ministries on policies involving lubricants but without specific powers to enforce laws. Industry players expect the agency to provide an effective check on the illegal trade of lubes in the country.
The Sri Lankan Cabinet earlier decided to grant more licenses for lube suppliers, and to increase registration fees for the businesses by $6,877 (Rs 1 million). Thirteen companies are currently licensed to sell lubes on the island nation. The cabinet also instructed the Consumer Affairs Authority to enact legislation to ensure consumer lubricant quality, and directed the Sri Lanka Customs and Department of Import and Export Control to strictly apply the guidelines issued by the Ministry of Petroleum Resources Development that affect lube imports.
Chinese JV Blends for Distributors
Acorn Oil and Linxian Petro­chemical opened a joint venture lubricant blending plant in Tianjin, China, in July. The facility focuses on providing toll blending services for automotive and industrial lubes.
The plant cost the equivalent of $375.8 million and has capacity to produce 200,000 metric tons per year of lubricants and vehicle maintenance fluids. To ensure sufficient supply of raw materials, it has a tank farm with base oil storage capacity of 70,000 tons.
Linxian is a lubricant marketer and base stock trader, while Acorn Oil is a lube producer arm of Acorn International Inc., a Chinese company best known for direct sales of consumer products such as backpacks. In the joint venture, which operates as Acorn-Linxian, Acorn is responsible for sales and marketing, and Linxian for research, manufacturing and daily operations.
AFPM Shifts Lube Activity
Lubricants & Waxes Committee of the American Petrochemical & Refiners Association officially changed its name to the AFPM Base Oils & Waxes Committee, effective Sept. 1. The 2016 annual conference, to be held November 10-11 at the Hilton Post Oak in Houston, will remain titled the AFPM International Lubricants & Waxes Conference and will include base oil and waxes sessions.
AFPMs Dan Strachan also noted that this will be the last year for this stand-alone base oils and waxes conference. Beginning in 2017, the base oil and waxes sessions will be integrated into the associations huge International Petrochemical Conference (IPC) slated for March 26-28, in San Antonio.
For information on these events, see www.afpm.org/conferences
Examining Diesel Oil Oxidation
As a part of the new API CK-4 and FA-4 heavy-duty diesel oil categories, a proposed ASTM test standard (WK52873) has been introduced – the first oxidation test in the United States to run on diesel. Earlier diesel oil categories had used a gasoline engine test, such as the Sequence III, to evaluate oxidation resistance. This Volvo T-13 test method for evaluation of diesel engine oils was developed by ASTM Committee D02, with support from the ASTM Test Monitoring Center.
The T-13 originally was going to measure ring and liner wear as well as engine oil oxidation (the ability to resist acidifying and deteriorating during use at high temperatures). However, the Volvo T-12 test limits were adjusted to cover the wear issues, leaving only the oxidation measurement to tackle.
Once the 360-hour test run is completed, oil performance is gauged by determining the percent change in kinematic viscosity at 40 degrees Celsius, and the extent to which the used oil absorbs certain wavelengths of light. Oxidation causes oil to thicken and to become more absorbent at particular wavelengths.
Hi-Tech Expands in Pakistan
Pakistani lube supplier Hi-Tech Lubricants Ltd. started commercial production at its 30,000 t/y blending plant in Lahore in early August, following approval from the countrys Oil and Gas Regulatory Authority.
Foreseeing potential growth in the countrys industrial sector, the company had raised about $17.3 million (Rs 1.81 billion) earlier this year through its initial public stock offering. It planned to fund a chain of retail fuel outlets in the domestic market and to install additional filling lines at its blending plant.
Hi-Tech, which set aside Rs 200 million from the IPO proceeds to invest in the blending facility and implement jerrycan- and drum-filling lines, expects the additional filling lines to help it sell more products in bulk, and to assist packaging and sales of industrial products and process oils. It also expects a boost in sales of drums and jerrycans to users in chemicals and paints industries.
Tianhe Debuts in Dubai
Chinese additive manufacturer Tianhe Chemicals began streaming at its production facility in Dubai, UAE, in late August. Originally slated to be online earlier this year, the site can make approximately 35,000 t/y of additive components and packages, CEO G.S. Ravi told LubesnGreases. The plant will mainly supply the Middle East region, he added, although some output will go to India, and part of its capacity will be reserved for contract manufacturing.
Tianhe claims to be the largest native Asian lubricant additive manufacturer. The Jinzhou-based company also has initiated sales in Japan this year, and is constructing a 40,000 t/y production facility with a toll producer in Singapore. Due to open in first-quarter 2017, the Singapore plants commencement was delayed from an initial target of mid-2016. Tianhe at one time was eyeing production in the United States, perhaps via a joint venture, but has said those plans are on hold.
Faces in the News
Elevance has a new president and chief technology officer: Karl Schoene. Schoene, a Ph.D. chemist, was most recently president and CEO of Accutest Laboratories and has also worked for InEnTec, AkzoNobel, Amoco, Albemarle and Ethyl Corp.
Marco Maccio has become global health & safety manager and corporate head of internal audit at Infineum. Previously a manufacturing manager at Infineum, he replaces Rob Holton, who retires after nine years in the role.
Tina Dasbach is now lab operations manager at Savant Labs. Dasbach joined the company in 2013 as operations manager for the Institute of Materials, after 22 years at Dow Chemical. She continues her operations role with Savants Institute of Materials, where she supports the global oil collection and annual database publication.
Marvin Kerkstra, manager of lubricants technology for Citgo Petroleum Corp., has been named chair of the Petroleum Quality Institute of Americas Advisory Board. Kerkstra succeeds Steve Mulvaney, who is retiring from Chevron later this year. Harold Hazen, manager of Americas marketing and BTI, will replace Mulvaney as Chevrons representative on the board.
Chevron Oronite appointed Koon Eng Goh general manager for manufacturing and supply chain for Asia-Pacific, replacing Jacques Cazin. The global additives company also named Yu Lee Toh regional manager for sales and marketing in the region, replacing Jeff Waite.
Sonneborn has promoted Clay Rozic to technology director, Americas. Based in Petrolia, Pennsylvania, Rozic is responsible for the technology departments quality control, regulatory, R&D, product development and innovation throughout the region. He has been with Sonneborn for 17 years, working in laboratory management and product development roles.
H. Carl Walther has joined Halocarbon Products as manager of technical services and support. He brings 31 years of industry experience, including the past 18 years with DuPont Krytox Performance Lubricants.
Briefly Noted
Chemtura Corp. has partnered with Canoil Canada Ltd. to be its distributor for finished grease products sold under the G-1000 and G-2000 series brand in Canada.
Mega-jobber PetroChoice has acquired the lubricants division of north-central North Carolina-focused distributor Rex Oil Co.
Houston-based biofluids company Accelergy Corp. and soy products producer Owensboro Grain LLC have formed a joint venture that will make biobased esters, waxes, specialty solvents, lubricants and performance fluids.
Amyris, Inc. received a multi-million dollar contract from the U.S. Department of Energy to develop cellulose-derived farnesene for biofuels and petroleum products such as base stocks.
United Kingdom-based Hydrodec began last month to collect, rerefine and supply transformer and switch­gear oils for Australian utility company Essential Energy.
India and the U.S. signed an agreement to enable logistical support, supplies and services between both countries militaries. Along with medical and food services, this includes provision of lubricants and other petroleum products.
Chevron Pakistan Lubricants recently broke ground for its West Wharf lube blending facility in Karachi. The project will include new bulk storage tanks, an additive decanting bay and bulk-filling facilities.
U.S.-based PolySi Lubricants named Superior Lubricants distributor for its silicone and synthetic lubricants in Australia and New Zealand.

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