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Neste Oil Oyj (PINKSHEETS:NTOIF) Finland's Neste Oil Corporation, Bahrain's Oil & Gas Holding Company (OGHC) and the Bahrain Petroleum Company (Bapco) have decided to establish a joint venture known as the Bahrain Base Oil Company to build a high-quality lubricant base oils plant in Bahrain. The plant will have an annual capacity of 400,000 tons of VHVI (Very High Viscosity Index) base oil for use in blending top-tier lubricants. It will be one of the world's largest VHVI base oil plants when it begins production, which is scheduled for the end of 2011.
Total investment cost of the project is estimated to be between 250 and 300 million euro, of which Neste Oil's share is 45%, same as the company's ownership in the joint venture. Both Bahrain's Oil and Gas Holding Company and Bapco own 27.5% of the joint venture. OGHC is owned by the Government of Bahrain and owns 100% of Bapco.
Feedstock for the new base oil facility will be provided by the hydrocracker unit commissioned in 2007 at Bapco's Bahrain oil refinery. Neste Oil will be responsible for the sales and marketing of the output of the joint venture plant. Bapco will also provide the Operations, Maintenance and Management services to the Joint Venture.
This project underlines Neste Oil's and Bapco's commitment to new-generation, high value-added base oils," said Kimmo Rahkamo, Executive Vice President, Specialty Products at Neste Oil. "Demand for these sulfur-free base oils is increasing globally, thanks to their ability to meet current and future performance requirements, as well as more stringent environmental standards. I strongly believe that this project will prove a success for both parties."
Neste Oil is one of the world's leading producers and marketers of VHVI base oils, which are marketed under the NEXBASE® brand. The new joint venture with Bapco will further extend the global reach of the company's business in this field. Bapco is renowned for its long and successful experience in the fields of oil and gas exploration, production, refining and marketing and for their Operational Excellence in safety and reliability.
Information on preparations for this joint venture program was originally published in August 2005. Neste Oil Corporation Osmo Kammonen Senior Vice President, Corporate Communications
Further information Mr. Kimmo Rahkamo, Executive Vice President, Specialty Products, tel. +358 (0)10 4584247 Mr. Matti Lehmus, Vice President, Specialty Products, tel. +358 (0)50 4584072
Neste Oil in brief
Neste Oil Corporation is a refining and marketing company concentrating on low-emission, high-quality traffic fuels. The company's strategy is based on growing both its oil refining and premium-quality renewable diesel businesses. Neste Oil also sees good growth opportunities for its high-quality base oils activities. Neste Oil's refineries are located in Porvoo and Naantali in Finland, and have a combined crude oil refining capacity of approx. 260,000 barrels a day. The company had net sales of EUR 12,103 million in 2007 and employs around 5,100 people. Neste Oil's shares are listed on the Nordic Exchange in Helsinki. www.nesteoil.com Oil and Gas Holding Company (OGHC) in brief
OGHC is a Bahraini joint stock company incorporated in 2007 . The objective of this company is to consolidate under one umbrella the Bahrain Government's shareholdings and stakes in energy related subsidiaries such as the Bahrain Petroleum Company (Bapco), the Gulf Petrochemical Industries Company (GPIC), the Bahrain National Gas Company (BANAGAS), the Bahrain Aviation Fueling Company (BAFCO) and the Banagas Expansion Project. In addition, OGHC will also be responsible for the investment of the Company's funds in areas that will add value to the Kingdom of Bahrain by participation in the establishment of new enterprises or other companies. The Company's authorized capital is 4.3 billion US$, representing the book value of the Government's shareholdings in the companies transferred to the Holding Company. (www.noga.gov.bh) Bapco in brief
The Bahrain Petroleum Company is an integrated oil company spanning the entire supply chain from exploration and production to refining and marketing. In 2007 the company celebrated 75 years of discovery of oil in the region and commissioned its 60,000 barrels per day hydrocracker which will provide the feedstock to the Joint Venture. The Bahrain Refinery has a refining capacity of approx. 265,000 barrels a day, supplying the local market as well as the international market with high quality products including 10 ppm ULSD. The corporate vision consists of expanding the crude running capacity of the refinery by 100,000 barrels a day as well as positioning ourselves to the production of high quality products complying with the highest international standards. (www.bapco.com.bh)
