Corporate News

Aramco expands its Yanbu refinery; Shell and BP consolidate in Africa; Chevron contracts but expands in Sri Lanka; better news for Fuchs; Ford sells Volvo to China;  Renault-Nissan join forces with Daimler; and Afton buys Polartech.

Expansion and contraction continues to dominate corporate news, starting in Saudi, where Aramco Lubricating Oil Refining Co (Luberef) has announced a $1bn expansion of its Yanbu refinery on the Red Sea coast.

Although coy about eventual production volumes, Aramco said that the expanded refinery would produce Type III base oil - new to the region.  Tenders for the project are expected to be offered in 2011 with construction taking around five years to complete.

Also in the Middle East, Shell strengthened sales of its Helix brand with news of an exclusive agreement for supplying Helix HX5 AX product to Hyundai dealers in the region, plus East Africa and selected CIS countries.  The deal was struck with distributors MOBIS Middle East and will last for three years.

However, consolidation was also on the Shell agenda, with news that they are selling downstream operations in 21 African countries and includes lubricant, LPG and bitumen businesses with the exception of fuels and lubes in South Africa and lubes in Egypt.   The move is in line the oil giants plans to slash retail operations by 35%.

BP is also set to sell-off some of its African assets, again retaining focus on its South African and Mozambique operations.  The sale of a range of fuel and lubes businesses in Namibia, Botswana, Malawi, Zambia and Tanzania accounts for around 20% of the company's sub-Saharan African turnover.

Chevron's activities also had a mixed month, first with news that the US-based company is looking to shed 2,000 jobs over the next 12 months as well as dispose of operations in Pembrokeshire (Wales the Caribbean and Central America.  On the other hand, the company is set to take advantage of a more stable environment in Sri Lanka by announcing plans to expand its distribution into the North and East of the country.

After a predictably poor start to 2009, there was better news in the end for Fuchs, whose final year figures benefitted from an upswing in the second half.  Sales revenue of €1.178bn was 15.5% down on the previous year, but significant reduction in expenses and a general improvement in the markets as the year progressed left the company with an operating profit of €174m, just o.5% down on the previous year.

In the automotive sector, Ford finally agreed the sale of its Swedish car brand, Volvo, to China's Geely.  The deal, worth $1.8bn, is for a 100% buy-out, although Ford will continue to supply Volvo with shared platforms, engines and transmissions under licence for an additional period.

Meanwhile the Renault-Nissan Alliance expanded to include Daimler with the news that the three auto manufacturers will take a 3.1% share in each other's business.  While remaining independent companies, the new partnership will ensure technology sharing including collaboration on new Smart and Twingo vehicles, Daimler engines for Nissan's luxury Infinti brand and joint development of light commercial vehicles.  Carlos Ghosn, CEO of the Renault-Nissan Alliance stated that alliances were the way forward for the automotive industry.

And finally, Afton Chemicals has been boosted its acquisition of UK-based Polartech, specialists in metalworking fluid additive technology.  The deal, for an undisclosed sum, will bring 130 full-time staff, annual revenue of around $45m, and major manufacturing sites in China, India and the US.