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The
Saudi Arabian Lubricating Oil Company was formed in 1968 by a Royal
decree. On the date of its inception, the company's name was Petromin
Lubricating Oil Company (Petrolube) which was one of the joint ventures
of the General Organization of Petroleum and Minerals (Petromin).
The current joint venture is between Saudi Aramco, holding 71% equity
and Mobil Investments with remaining 29%.
The
company was renamed as the Saudi Arabian Lubricating Oil Company
in 1997 after Petromin's shares in the company were transferred
to Saudi Aramco.
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The purpose of establishing the company was to provide lubricants to the
Saudi market as strategic commodity that has become increasingly necessary
and in-demand to the development of Saudi Arabia. Since Saudi Arabia is
the largest oil producer and possesses the main ingredients for the manufacturing
of this product, it was only a natural and necessary step to establish
a company exclusively for the production of lubricants. The company started
its production through its first blending plant in Jeddah in 1970.
The first plant in Jeddah was designed to blend 70,000 M. tonnes; today
the plant has doubled in size to blend 150,000 M. tonnes or 1 million
bbls annually. The vast geographical spread of Saudi Arabia and the quick
development of its infrastructure justified the building of another plant
in Riyadh to cover the increasing market demand. Riyadh plant was completed
in 1982 with a capacity of 150,000 M. tonnes. In 1985, another plant was
built in Jubail with a similar capacity for lubricants along with the
first grease manufacturing plant in Saudi Arabia and the Middle East to
produce 6000 M. tonnes of all kinds of greases.
The increased blending capacity allowed the company to conclude third
party blending arrangements, whereby competitors in this field utilized
the plants of the company to produce their own brands through blending
fee arrangements. Many of the major international companies blended their
products at the company's plants, such as Mobil, Elf, Agip, Gulf, TOTAL
and others.
In 1995, the company decided to build its own drum manufacturing plant
in Riyadh to cover its own requirement of over 200,000 metal drums annually
and sell the same to the third party blenders.
Within
the 35 years, since its inception, the Saudi Arabian Lubricating Oil Company
has continually expanded and grown in manufacturing capacity and product
development. Striving always to remain on the forefront of technology,
by keeping its products abreast with all original engine manufacturer
(OEM) approvals and keeping up with American Petroleum Institute (API)
and other worldwide entities' performance levels and specifications for
their products. Today, the Saudi Arabian Lubricating Oil Company produces
over 150 different products, has 28% market share of lubricant demand
in Saudi Arabia and exports to over 30 countries in the GCC, Middle East,
Africa and Asia. Where it is deemed that exports are not feasible, and
where the demand for Petromin Oils is attractive, the company normally
concludes royalty blending arrangements whereby Petromin Oils gets its
product manufactured and marketed under its brand name and under company's
strict quality controls and procedures. Such arrangements are now exist
in Morocco, Syria, Pakistan and Egypt; other countries will follow soon.
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