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Chevron (CVX) Signs Deal to Acquire Neste's Base Oil Business
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Chevron Corporation (CVX - Free Report) , through its wholly-owned subsidiary Chevron Global Energy Inc., entered an agreement with Neste Oyj to acquire the latter’s base oil business in Finland.
Base oils are used to manufacture lubricants and related products, and are specialty products that can be produced from oil-refining operations. Neste’s base oils are produced at its Porvoo refinery in Finland by a base oil joint venture with Bapco and Nogaholding in Bahrain.
The agreement will cover oil refiner Neste's Porvoo base oil production volumes, its premium brand NEXBASE, brand and formulation approvals, and a global marketing and distribution platform. As part of the deal, the companies agreed on a long-term offtake for Neste’s base oil supply from the Porvoo refinery. Also, Neste signed an agreement to exit its base oil joint venture with Bahrain Petroleum Company and Nogaholding.
The acquisition is expected to fulfill the rising customer demand to meet the increasingly stringent lubricant standards, which are driven by evolving vehicle specifications. It will also help maintain the technology leading positions of Chevron’s past base oil investments. The transaction is expected to close in four to six months, subject to customary antitrust regulatory approvals and other closing conditions.
Chevron is a leading manufacturer of base oils and one of the largest suppliers of finished lubricants globally. The company owns one of the world’s largest base oil manufacturing platforms through its refining network and its base oil licensing technology position. In 2020, the company launched renewable base oil, which is gaining significant popularity in the base oil market.
Peers like Exxon Mobil Corporation (XOM - Free Report) , Royal Dutch Shell plc and Repsol SA (REPYY - Free Report) are some of the leading players operating in the base oil market. In 2019, Repsol acquired a 40% stake in United Oil Company, which increased its presence in Southeast Asia, one of the largest and fastest-growing lubricants markets globally.
Since March 2020, the base oil industry has been facing unprecedented challenges as the coronavirus pandemic caused significant volatility in the demand for lubricants, and disrupted the production and supply of base oils and additives. With the economy gradually recovering from the pandemic-induced crisis, the global base oil market is expected to grow to $27.95 billion in 2021, witnessing a compound annual growth rate of 2.1%.
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Chevron (CVX) Signs Deal to Acquire Neste's Base Oil Business
Chevron Corporation (CVX - Free Report) , through its wholly-owned subsidiary Chevron Global Energy Inc., entered an agreement with Neste Oyj to acquire the latter’s base oil business in Finland.
Base oils are used to manufacture lubricants and related products, and are specialty products that can be produced from oil-refining operations. Neste’s base oils are produced at its Porvoo refinery in Finland by a base oil joint venture with Bapco and Nogaholding in Bahrain.
The agreement will cover oil refiner Neste's Porvoo base oil production volumes, its premium brand NEXBASE, brand and formulation approvals, and a global marketing and distribution platform. As part of the deal, the companies agreed on a long-term offtake for Neste’s base oil supply from the Porvoo refinery. Also, Neste signed an agreement to exit its base oil joint venture with Bahrain Petroleum Company and Nogaholding.
The acquisition is expected to fulfill the rising customer demand to meet the increasingly stringent lubricant standards, which are driven by evolving vehicle specifications. It will also help maintain the technology leading positions of Chevron’s past base oil investments. The transaction is expected to close in four to six months, subject to customary antitrust regulatory approvals and other closing conditions.
Chevron is a leading manufacturer of base oils and one of the largest suppliers of finished lubricants globally. The company owns one of the world’s largest base oil manufacturing platforms through its refining network and its base oil licensing technology position. In 2020, the company launched renewable base oil, which is gaining significant popularity in the base oil market.
Peers like Exxon Mobil Corporation (XOM - Free Report) , Royal Dutch Shell plc and Repsol SA (REPYY - Free Report) are some of the leading players operating in the base oil market. In 2019, Repsol acquired a 40% stake in United Oil Company, which increased its presence in Southeast Asia, one of the largest and fastest-growing lubricants markets globally.
Since March 2020, the base oil industry has been facing unprecedented challenges as the coronavirus pandemic caused significant volatility in the demand for lubricants, and disrupted the production and supply of base oils and additives. With the economy gradually recovering from the pandemic-induced crisis, the global base oil market is expected to grow to $27.95 billion in 2021, witnessing a compound annual growth rate of 2.1%.