United Arab Emirates
Abu Dhabi National Oil Co. signed agreements Sunday selling a combined 35 percent stake in itself to Eni and OMV for a total of $5.8 billion. The companies said they intend to expand Adnoc operations, including its refining complex in Al Ruwais, United Arab Emirates, which has a base oil plant.
Worries about the Middle East finished lubricants market have dominated recent news headlines, but according to one industry veteran, the outlook for the sector holds promise in the medium term.
The Middle East has become a prominent producer and net exporter of API Group II and Group III base oil, using its glut of over 2 million tons of material to cater to demand in India, North America and Western Europe, an industry insider said at a conference in Moscow.
Higher insurance premiums could put upward pressure on prices for API Group II and III base stocks from the Middle East Gulf after last weeks decision by Londons marine insurance market to widen its list of areas around the gulf that pose perceived enhanced risk for marine insurers.
Iranian companies are shipping API Group I base oils direct to customers, sidestepping ports in the United Arab Emirates as the United States tightens sanctions on the Islamic Republics exports.
Indias Maximus International Ltd. said its United Arab Emirates-based unit plans to acquire a controlling stake in Pacific Lubricants LLC, a producer with a plant in the UAE.
Abu Dhabi National Oil Co. signed an exclusive agreement last week for Chemlube S.A. to distribute its API Group III base oils in Europe.
Abu Dhabi National Oil Co. expects to complete formulation approvals for ADbase, a range of API Group II and Group III base oils, within the next year. Speaking on the sidelines of the Base Oil & Lubes Middle East 2018 conference held in Abu Dhabi, an executive said Adnoc is also expanding into new markets in Asia.
A recent analysis of the Middle East base stocks scene found the region increasingly mirrors trends in developed economies, though its evolution is often uneven and depends on local market conditions.
Wider use of synthetic engine oils and a shift to electric vehicles could reduce the threat of environmental contamination from waste oil in the Middle East, a region historically dominated by mineral-based lubricants.
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