Lukoil Volumes Dip in 2013

Lukoils production of base oils and lubricants combined fell 8 percent last year compared to 2012, but it still captured 48 percent of the combined market in Russia, according to the companys recently published annual performance report.

The company said it produced more than 1.1 million metric tons of base oils and lubricants combined, down from its 2012 output that reached 1.2 million tons.

Last year Lukoil produced 1.05 million tons of base oils at its three base oil plants in the Perm, Nizhny Novgorod and Volgograd refineries, down from the 1.13 million tons produced in 2012.

The slight drop in output is a result of the reduced consumption of Gost specification oils and extended oil change intervals against the backdrop of the healthy renewal of the [Russian] vehicle fleet, the company stated in the report. However, the demand for high-tech oils is on rise.

Lukoil produced 101,000 tons of finished lubricants in its Russian and foreign blending plants located in Tyumen oblast (Russia), Finland, Romania and Turkey. The companys sales of high-performance oils produced in Russia rose 19 percent to 24,000 tons in 2013.

Last year Lukoil introduced 25 new products, according to the report. It signed several partnerships and factory fill deals with foreign car companies, introduced a new lube brand on the Russian market and bought an 80,000 tons per year lube production facility in Austria. It also broke ground on a new 100,000 t/y lubricant plant in Kazakhstan.

The companys priority for 2015 is to develop new products in cooperation with the automotive sector and to expand the range and sales of its industrial oils. Its key objective is continuous improvement of its product range. At the moment the company offers more than 600 different products and has more than 350 official OEM approvals.

In 2013 the company increased its sales of high-performance industrial oils by 47 percent compared to the year before. Exports of these oils in the Lux and Vanguard-branded product range rose by 18 percent and 13 percent respectively, Lukoil said.

In 2013 Lukoil also made a breakthrough in expansion of its marine oils and additives production.

It signed a marine oil supply agreement with American company Carnival Group, for the companys entire fleet, including the flagship cruise ship Queen Mary, according to the report. Also, Lukoil lubricants are being used by the Russian navys helicopter carrier– the Vladivostok (Mistral class) helicopter carrier — the first of two ordered by the Russian defense industry and due to be delivered by France in October. Our marine oils are produced in 22 plants and supplied to 700 ports in more than 64 countries, the company stated, adding that it held about 4 percent of the global marine oil market in 2013.

Last year Lukoil made some improvements in its additive production at its plant in Belarus. LLK Naftan, a joint venture between the Russian oil major and Belarus refinery Naftan, rebuilt its reactor block at the plants sulfonate additive unit, and it commissioned a research lab to perform the latest international methods for testing of marine oils. The companys marine oil additives production grew by 20 percent in 2013.