Chevron to acquire Neste’s global base oil business
Chevron Global Energy Inc, a wholly owned subsidiary of U.S.-based Chevron Corporation, one of the world’s leading integrated energy companies, has signed an agreement with Finland’s Neste Oyj to acquire its NEXBASE™ base oil brand, associated qualifications and approvals, and related sales and marketing business.
The parties have agreed that the transaction price shall remain confidential. The transaction is expected to close within four to six months or the first quarter of 2022, subject to customary antitrust regulatory approvals and other closing conditions.
Neste to exit base oils joint venture with Bapco
The agreement covers a combination of share and asset deals forming Neste’s entire global base oils business. As part of the divestment, the parties have also agreed on a long-term offtake for Neste’s base oils supply from Porvoo, Finland. With the same date, Neste has signed an agreement to exit its base oils joint venture with Bahrain Petroleum Company (Bapco) and Nogaholding.
“We expect the addition of the NEXBASETM brand and associated business to provide value to our customers through improved logistics, reduced complexity and optimized solutions,” said Alicia Logan, general manager of Chevron Base Oils. “This acquisition is poised to satisfy our customers’ growing needs to meet increasingly stringent lubricant standards driven by evolving vehicle specifications, and maintains the technology leading positions of our past base oil investments. Coupled with our investment in Novvi to bring renewable base oils to the market, this acquisition positions Chevron to be the supplier of choice to meet customers’ needs both today and into the future.”
“I want to thank our people in the base oils business who have been known for their pioneering spirit throughout the years. They have built the foundation for Neste to become one of the world’s leading producers of Group III base oils, and we can be extremely proud of that. Chevron being a leading manufacturer of base oil products is therefore an excellent company to nurture and develop the NEXBASE base oils business further,” says Neste’s President and CEO Peter Vanacker.
Neste’s base oils have been produced in Porvoo, Finland, and by a base oils joint venture with Bapco and Nogaholding in Bahrain. The agreement with Chevron will cover Neste’s Porvoo base oils production volumes, its premium brand NEXBASE™, all formulation coverage associated with the brand, as well as a global marketing and distribution platform. In connection with the divestment, Neste is exiting the joint venture with Bapco and Nogaholding, and will no longer have a presence in Bahrain. Neste Base Oil, Bapco, and Nogaholding started commercial production at the base oil plant in Bahrain in October 2011. The joint venture in Bahrain produces premium quality VHVI (Very High Viscosity Index) Group III base oils for use in top-tier lubricants.
In 2019, Neste enhanced its production capacity by launching production of its Group III base oil at Chevron’s base oil plant in Richmond, California, U.S.A.