Texas-based Exxon Mobil Corporation, one of the world's largest oil and gas company, plans to set up a lubes blending plant in India, according to two executives aware of the development.
ExxonMobil sells its lubricants under the brand name Mobil and has been present in the Indian market for a few years now. "ExxonMobil is planning to set up a lube blending plant in Khopoli in Raigad, Maharashtra. The company wants this facility to be one of its largest in Asia with over 500,000 barrels per year capacity," said an official aware of the development.
In an emailed response the company said, "As a matter of practice, we do not comment on market rumours and speculation. ExxonMobil continuously evaluates its global portfolio of businesses and opportunities for growth, restructuring, acquisition or divestment, depending upon fit with its overall strategic business objectives."
With energy efficiency improvements, the global energy demand growth will decline by around 25% over the next 20 years. Thus emerging markets of non-OECD (Organisation for Economic Co-operation and Development) nations will account for essentially all energy demand growth, led by economies in the Asia Pacific region, such as China and India.
In its annual report for the year 2018, the company said, "ExxonMobil is the market leader in high-value synthetic lubricants. Synthetics growth to meet global demand for higher-performance products remains a strategic priority and includes significant investments in growing markets, such as China, India, and Indonesia."
"Exxon's India facility will be a sophisticated one. The company is currently doing safety and environment study," the second executive quoted above said.
Though India's auto sector is reeling under slowdown, the lubricants industry has been optimistic of its prospects, expecting to grow at 2-3% over the next few years. Given India has been a growth market for the auto sector, the country's lubricants segment has, in the past five years, seen the entry of Malaysia’s Petronas and Spain’s Repsol. While Petronas Lubricants International has launched a $50-million lubricant blending plant at Patalganga, Maharashtra, Repsol -- Spain’s largest petroleum company -- entered India by announcing a partnership with UAE-based Gulf Petrochem.
"India is still an emerging vehicle market and we see huge growth opportunity in that space. Lubricants growth will only mirror auto and industrial growth," added the second executive. Personal mobility segment is the largest growth segment for lubricants companies, followed by industrials.
However, it's not only the lubricant segment that ExxonMobil finds attractive in India. The company has been, over the past few months forging tie-ups with various stakeholders to further its presence in the country.
This October, ExxonMobil India LNG Limited, an affiliate of ExxonMobil, signed a memorandum of understanding with Indian Oil Corporation Ltd. (IndianOil), to expand its liquefied natural gas (LNG) business initiatives in the country. The two companies plan to focus on exploring new models of delivering cost-effective natural gas in India. ExxonMobil has been delivering natural gas to India for nearly two decades. Gas currently accounts for just under 6% of energy demand in India. The government plans to increase this share to 15% by 2030.
In the same month, ExxonMobil Research and Engineering Company partnered with the Indian Institute of Technology - Madras (IIT-M) for research on energy and biofuels for five years. The joint research agreement will focus on biofuels, data analytics, gas conversion and transport and find low-emission energy solutions.
Last month, the company tied up with state-run Oil and Natural Gas Corporation to cooperate in technical studies and frontier areas which could lead to joint programmes in deepwater and other petroleum exploration licence blocks held by ONGC in offshore India’s east and west coasts, and joint bids for open acreage.