Lubes News
Fuchs, Kline, IEA and Lubes majors' bosses give their views on the next decade; Nigerian deregulation faces setback; Petronas and Proton in lubes deal; explosion at Java refinery and IOC brings Servo to Middle East.
As the new Decade begins, expert thoughts turned to the future of the lubricants industry. Following a White Paper written in association with OATS in 2009, Fuchs' Head of Strategic Marketing Apu Gosalia and Board Executive Lutz Lindemann gave their unvarnished perspective at the Tribology Colloquium in Germany in early January 2010.
As reported by Lube Report's Lisa Tocci, Gosalia and Lindemann first looked back at a three year period from 2007-9 which saw global lubes demand drop to the lowest levels for forty years, falling to 32 million metric tons last year.
|
The BRIC countries They went on to predict a 5-10 year period of stagnation or slow growth, with the increase in volume from emerging markets being offset by higher lubes quality standards. This view was reinforced by the Kline report outlined in the January OATS Bulletin.
The emerging markets include the BRIC group - Brazil, Russia, India and China - a group which, according to the Fuchs team, showed strong demand during the global recession but not enough to pull the lubes market out of its downward spiral in 2009. Supporting the Fuchs view, a new Kline report on BRIC showed that more than one quarter of the total finished lubricants demand came from these four nations, a figure that is predicted to rise to nearly one third by 2013.
China has led the way, followed by India, Russia, then Brazil. However, Brazil's automotive market accounted for 30% of the country's total lubes demand, the highest of all the BRIC group.
Meanwhile the 'developed world' has apparently reached its peak in lubricants demand, according to the International Energy Agency. The organisation's Chief Economist, Fatih Birol, claimed that fuel efficiency and the growth of alternative energy sources means that oil use will never return to 2006/7 levels. He also claimed that the downward demand trend amongst OECD countries would offset consumption in emerging countries, thus reducing tension on oil prices.
However, the Fuchs, Kline and IEA views were tempered by warnings from oil industry bosses at the Davos World Economic Forum. BP Chief Executive, Tony Hayward stated that the next 20 years will see a "supply challenge" that means an increase in oil production of an extra 15m barrels a day to 100mbd, with the challenge being to meet demand while "keeping a lid on price". Shell boss Peter Voser, added to the debate by estimating an industry investment need of $27trn to meet the increase in demand.
At the more immediate end of the lubes industry, the American Petroleum Institute (API) retired two major heavy-duty engine oil categories. From 1st Feb 2010, API CF-2 will become obsolete, with all AP-CF standard licences set to expire by 30 December 2010. No new licences for this standard have been issues since December 2009. Worldwide, around 700 products are licences to CF/CF-2 standards. Replacement oils are likely to be licensed under the API CH-4 or CI-4 categories.
In news from around the world, Nigeria's hopes of deregulating its downstream lubes activities face challenges to its rapid delivery. Despite the best efforts of the government's Ministry of Petroleum Resources, the apparently controversial plans to deregulate and abolish fuel subsidies may be significantly slowed by the state of local production and distribution infrastructure, thus creating supply issues and driving up prices for domestic and transportation fuels and lubes.
In Malaysia, national oil producer Petronas has signed a long-term deal with automotive manufacturer Proton as sole lubricants suppliers for their entire car range. The 10-year contract will involve the annual supply of 1.4m litres of lubricants to Proton, creating an increase in Petronas' domestic market share.
In central Java, state oil producer Pertamina suffered a sudden halt in production after an exlposion at its Cilacap refinery. The site produces 348,000bd of gasoline, diesel and kerosene fuels for the Java and Bali markets. This is not the first explosion at the refinery. Previous incidents have halted production for several weeks.
And in the Qatar, the Indian Oil Corporation's (IOC) Middle East arm appointed Al Mana Enterprises as sole distributor of its high-performance Servo lubricants range. Servo already retails strongly in Africa, South East and West Asia.