U.S. Lifts Sanctions on Nynas
Nynas AB announced last month that Petroleos de Venezuela S.A. sold a 35 percent stake in the company, resulting in the United States lifting sanctions against Nynas.
PdVSA owned 50.001 percent of Nynas, which subjected the Swedish refiner to U.S. economic sanctions aimed at punishing the Venezuelan administration of Nicolas Maduro.
Nynas, one of the world’s largest suppliers of naphthenic base stocks, blamed those sanctions for financial problems that forced it to file for reorganization in a Swedish court on Dec. 13.
The 35 percent stake passed to an independent Swedish foundation created specifically to allow PdVSA to reduce its holding. Nynas did not say whether the foundation is intended to keep that stake or if it is just holding it temporarily. Officials said that the divestment will allow Nynas to complete its reorganization.
Finnish oil company Neste still owns the remaining 49.999 percent of Nynas.
The lifting of sanctions means U.S. companies no longer require an authorization from the U.S. Office of Foreign Assets Control to engage in transactions or activities with Nynas. The company can now secure financing to buy necessary crude oil.
GP Global Acquires Nigerian Blender
GP Global acquired the lubricants assets of Lagos, Nigeria-based Grand Petroleum. A GP Global executive said the acquisition is part of a bid to expand its lubricant and base oil operations.
Grand Petroleum, part of the Nigerian industrial conglomerate Nosak Group, operates a 50,000 t/y lubricant blending plant in Lagos. The acquisition includes Grand Petroleum’s distribution network and the HiSpeed lubricant brand. Terms were not disclosed. GP Global said it will also use the facilities, with storage tank capacity of 6,000 kiloliters, to store and distribute base oils.
The acquisition is United Arab Emirates-based GP Global’s first foray into the African lubes market since its acquisitions of Ipol Lubricants and Mag Lube in 2014. The company also has manufacturing partnerships with Repsol and Cepsa and recently announced the construction of a $14 million lube blending plant in India.
The company aims to produce 450,000 metric tons of lubricants five years from now. It sells industrial and automotive lubricants, process oils, transformer oils, greases and specialty oils.
Interchange Emergency Enacted for Additives
The American Chemistry Council’s Petroleum Additives Panel developed an emergency protocol to deal with what could be unprecedented disruption to additive supply chains due to the covid-19 pandemic.
The protocol provides general guidelines for additive companies to replace chemical components if a material normally used in a finished lubricant or an additive package becomes unavailable. The guidelines can be found on the ACC’s website.
PAP officials noted that the industry already has the American Petroleum Institute’s Emergency Provisional Licensing process, which allows individual engine oil marketers to apply for changes to the formulations of licensed products by making substitutions in case of disruptions to their supply chain. However, panel member companies realized that the API 1509 process alone could be insufficient to address widespread global disruptions for multiple lubricant oil additive suppliers.
The Petroleum Additives Panel said it was enacting its emergency protocol for 120 days but has the ability to extend that period. Once it expires, companies will have 90 days to revert to original formulas unless they are following their own management process, in which case those must be completed within 180 days.
Oil Trader Ensnared in Scandal
Hin Leong Trading, the giant oil trader at the center of one of Asia’s biggest current business scandals, is also a lubricants supplier and one of China’s biggest independent grease producers.
The Singapore-based company—along with its shipping arm, Ocean Tankers—filed in a Singapore court on April 17 for bankruptcy protection from creditors. In the filing, Hin Leong founder Lim Oon Kuin admitted that the company ran up $800 million in losses in recent years from oil futures trading and that he instructed the company’s finance department not to report them. The company reported a $78 million profit for the fiscal year that ended in October but has lost money for several years, the filing said.
The creditors from whom the company is seeking protection include 23 banks that are owed a combined $3.9 billion.
After banks objected to the bankruptcy filing, Hin Leong withdrew it and requested that PricewaterhouseCoopers be appointed judicial manager.
The company’s Singapore blending plant has capacity to make 50,000 tons per year of marine, automotive and industrial lubes. It also operates a 10,000 t/y grease plant in Fuzhou city, in China’s Fujian province, where the company has a second 50,000 t/y lubricant plant.
Pandemic Brings Closures, Furloughs
In an attempt to protect their balance sheets as demand bottoms out, lubricant companies are tamping down production and personnel costs.
Calumet Specialty Products Partners L.P. announced in early April that it would close its Bel-Ray lubricants plant in Farmingdale, New Jersey, which produces synthetic, industrial and commercial lubricating oils.
The company also planned to furlough manufacturing employees at its refinery and polyol ester-based synthetic lubricant production facility in Louisiana, Missouri.
Calumet said these and other measures will save $20 million to $30 million.
Some used oil rerefineries have announced similar measures. Safety-Kleen shuttered nearly half of its production in April, including its 1,200 b/d rerefinery in Newark, California, which had just reopened at the end of 2019 after an approximately two-year hiatus. Parent company Clean Harbors has downsized its workforce through furloughs and other actions.
Heritage-Crystal Clean moved up planned maintenance at its Indianapolis plant from autumn to May and said it would evaluate whether to keep the refinery idle until market conditions improve. The company is also implementing furlough and workshare programs and suspending all non-essential capital expenditures.
The Chinese government announced a six-month postponement of its China VI emissions standard for light-duty vehicles, which had been scheduled to take effect July 1. The delay was approved in order to assist the nation’s automobile industry, which has seen a sharp drop
in sales during the covid-19 pandemic.
Tatneft has finished building a $13.4 million, 25,000 t/y lubricants blending plant at the site of its Taneco refinery in Nizhnekamsk, Russia, with plans to start operations this month.
Southwest Dingsheng Energy plans to build a base oil rerefinery in Xi Feng County, Guizhou province in China. The 159.8 million yuan ($22.6 million) API Group I plant will have capacity to produce 60,000 t/y.
Clean Harbors acquired an API Group II+ rerefinery in New Hampshire from Green View Technologies Inc. The rerefinery has Group II+ base oil production capacity of about 260 b/d.
Faces in the News
J. Kent Masters has been named chairman, president and CEO of global specialty chemical company Albemarle Corp.
The Society of Tribologists and Lubrication Engineers elected Paul Hetherington from Petro-Canada Lubricants Inc. as the organization’s 2020-2021 president.
Suzan Jagger has been named vice president of the IHS Markit Oil, Midstream and Downstream Consulting team.
Chris Wholley succeeded Peter Vickers—who will remain as chairman—as managing director of UK-based Vickers Oils on March 30. Wholley has served as deputy managing director for several years and as technical director since 2002.
Idemitsu Lubricants America appointed Michael Park senior director of aftermarket sales and operations in North America.