ABU Dhabi Oil Refining Company (Takreer) has signed a heads of terms agreement to form a joint-venture company with Finland’s Neste Oil and Austria’s OMV, to produce sulphur-free, very high viscosity index (VHVI) Group III base oils, to use in blending top-tier lubricants, according to a statement from the companies.

They have reached an agreement on the basic principles for the design, construction, and operation of the base oil facility, as well as the venture’s commercial terms.
The facility, which is planned to be built in close proximity to Abu Dhabi’s existing Ruwais refinery, will have a 500,000 barrels per day (bpd) capacity of VHVI base oils and draw its feedstock from the Ruwais refinery hydrocracker unit.
Neste and OMV will bring their experience and technological know-how to the project, with Neste initially taking responsibility for the marketing. Neste and OMV will hold a 20 per cent stake each in the venture, while Takreer will hold the remaining 60 per cent.
The companies are hoping to award a front-end engineering and design (Feed) contract by the second quarter of 2008, after which a final investment decision will be made.
The project is yet another example of Middle Eastern National Oil Companies (NOCs) reinvesting their vast windfalls in building up international capacities and taking IOCs in as minority owners in order to get access to their technological experience and knowledge.
It demonstrates the ever-greater need for IOCs to excel in technology, marketing, and organisational skills, in order for their knowledge always to be relevant to the NOCs and not be beaten by those NOCs on their own territory.