October 19, 2016
Volume 17 Issue 52
Total to Blend Lubricants in Russia
French oil major Total broke ground Monday on its first lubricants blending plant in Russia, a project that could dovetail with the country’s emphasis on localizing production and reducing reliance on imports.
The plant will have initial capacity to produce 40,000 tons per year of finished lubricants, with the ability to increase that number by 35,000 t/y, Total Vostok, the Russian subsidiary of Total, said in its Oct. 17 press release.
The plant will be built on a 17-acre plot in Vorsino, Kaluga Oblast, in the center of the European part of Russia.
The U.S. $50 million plant is expected to be ready by 2018, under an investment agreement signed by Kaluga Gov. Anatoly Artamanov and Total Vostok General Director Fabien Voisin.
“Russia has been Total’s strategic partner for more than 20 years, and this project proves that we are not only interested in investments related to hydrocarbon exploration and production but in such endeavors as production and marketing of petrochemical products,” Total Chairman and CEO Patrick Pouyanne said during a plenary session of Russia’s Foreign Investment Advisory Council on Monday in Moscow. The council is chaired by Russian Prime Minister Dmitry Medvedev. “Russia is the world’s fifth-largest lubricant market, and thanks to this project, Total expects to accelerate its development here by strengthened presence and a continuing growth,” Pouyanne said.
Total Vostok said the plant will produce a wide range of automotive and industrial lubricants. It will feature the flagship Total brands such as Quartz passenger car motor oils, Rubia heavy-duty vehicle engine oils, and Azoll and Equivis hydraulic oils, as well Seriola and Carter industrial oils and other products.
Total and Elf, another brand of the French oil major, are among the top 10 most popular motor oil brands sold in Russia, according to consultancy Ernst & Young’s Moscow oil and gas center.
The plant is being built in an industrial park with direct links to European Russia’s main road and rail infrastructure. “This will allow an uninterrupted and guaranteed supply of our products not only in the Russian market but in the neighboring markets of Belarus and Central Asia,” Total said. The plant is expected to employ about 50 when it opens.
Russia’s government has encouraged companies to switch from imported raw materials and products to domestic alternatives to help support a domestic economy that is in recession due to a variety of economic sanctions imposed against the country, along with factors such as capital flight, increased military spending, low oil prices and devaluation of the ruble currency. The United States and a number of European Union member states imposed sanctions against Russia because of its support of the armed insurgency in Ukraine and the annexation of Ukraine’s Crimea region into the Russian Federation.