ICIS Word Base Oils and Lubricants Conference Report 2017
The ICIS World Base Oils and Lubricants Conference has established itself as a premier event for the lubricants sector and not only for those working in the UK. Offering more than Base Oils, today’s ICIS conference attracts speakers from lubricants blenders, manufacturers and additive companies as well as OEMs and re-refiners in a comprehensive conference for the whole of the sector.
ICIS always proves popular with delegates. This year over 600 delegates from over 300 companies in 50 countries attended the event in London held as it always is in February. ICIS week as it has become known began for me with the annual SIP dinner held at One Whitehall Place in London . With guest speaker BBC journalist Gavin Hewitt on hand to bring recent global events into perspective, the dinner was a welcome event to step back from the day to day to consider wider geo-political issues affecting our sector.
The theme of this year’s ICIS World Base Oils and Lubricants Conference was ‘Markets in Transition; Drivers for Base Oil Change’. Certainly since last year there had been significant changes in our sector. Although the oil price had partially recovered from its recent three year low, it still stubbornly bumps along at around $50 a barrel. So although many forecasters are predicting a medium-term average of $75 a barrel, the green shoots of recovery still seem to be some way off in the distance.
The first speaker at this year’s conference was Stephen Le Roux Head of Economics at the UK Chemical Industries Association. The topic was Brexit; its implications for industry and trade . Although the UK referendum was held
as long ago as June 2016, notice to leave the EU under Article 50 had still not been served by the UK at the time Stephen stood up to speak. He proposed that both the EU and UK were setting up their initial negotiating positions and the eventual outcome would be a compromise that both parties could live with, even if only for the short-term. The big danger that Mr Le Roux saw on the horizon was the impact of protectionism especially from the United States with the change of political leadership and whether this would spread to other countries around the globe.
the need to reduce emissions, Group II’s rapid growth has come as little surprise. If Group II provides an effective solution to a wide range of automobile engine requirements the challenge is to maximise the value capture of the base oil which has come under margin pressure as supply of the stock has increased in Europe and throughout the world. At the moment European demand outpaces supply in Western Europe although this could change when ExxonMobil’s Rotterdam refinery comes on stream. An overview of global base oil supply and demand and regional trade flows followed from Stephen Ames of SBA Consulting.
President of UEIL, Valentina Serra-Holm who is also Commercial Director, Nynas looked at Base Oil refining in a crude oil price volatility environment. Dr Serra-Holm asked whether low crude oil prices undermine the development of alternative and renewable technologies. Citing the International Energy Agency’s view that crude oil price volatility will continue throughout much of 2017, driven by increasing supplier output, Valentina suggested that end users have adjusted to lower crude prices which cause margin volatility for major lubricant and base oil suppliers.
Next Exxon-Mobil’s Ted Walko looked at the role of Group II in Europe. Driven by increasing demand for efficiency and
Stephen talked about the way in which global demand had tracked with GDP growth but is expected to stay relatively stable over the course of the next few years. On the supply side major capacity additions have partially offset the postponement and cancellation of projects we have seen as a result of the lower oil price which will lead to an increase in supply over the next few years as some major additions come on stream.
The environment is a key area of interest for the lubricant sector. Michael Collins, Technical Director of Environment Resource Management’s presentation in the afternoon on Used Oil Management Systems in California posed the questions about moving to a system where more used oil is recycled and re-refined. He was followed by a stalwart of the conference speaker circuit, Ernie Henderson of K&E Petroleum Consulting who talked about the Changing Base Oil landscape and Impact on Heavy products. Ernie spoke about Group I refineries still having a place in base oil production but they need to specialise in areas of opportunity such as brightstock production.
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LUBE MAGAZINE NO.139 JUNE 2017
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