Production and sale of lubricants is a separate business of the LUKOIL Group. Lubricants are produced by the Group's refineries in Perm and Volgograd. The Company also makes lubricant blends of finished components (of in-house production and those purchased from third parties) at its enterprises in Russia, Finland, Romania, Turkey, and Austria.
One of the key goals in development of this business is to create a product mix that would meet the current requirements; over the last five years the product mix has been significantly expanded from 230 to 400 brands. Fifty-two new kinds of lubricants were engineered in 2015, and formulations of 57 products were revised.
The Company offers a quality alternative to foreign lubricants and, being more stable when it comes to pricing, is able to efficiently substitute any imports.
In addition to products targeting end consumers, the Company is actively developing as a supplier of lubricants initially filled by manufacturers.
Its production facility in Austria is certified for conformance with the VDA 6.3 standard of the German Association of Car Manufacturers, as a result of which it was assigned the highest qualification of an "A" grade supplier demonstrating that German automotive companies are ready to use LUKOIL lubricants for initial filling at the plant.
In 2015, PJSC LUKOIL continued developing its vessel business. Unique products and services were launched to the market. A smart iCOlube system for use of cylinder oil was engineered that is enjoying great interest from the major global shipping companies. In October 2015, LUKOIL was awarded a prize in Dubai as innovation company of the year in maritime shipping.
Thus, in 2015 LUKOIL's share on the global marine oil market grew to 9.5% (from 5% in 2014). Every twelfth vessel in the world utilized LUKOIL branded oil (LUKOIL oil). Construction of a tank farm was completed in Austria. It will help increase supplies of Volgograd refinery's base oils to the European market.
In 2015, sales of LUKOIL's synthetic oils for passenger cars doubled, in September 2015 LUKOIL GENESIS oils were launched to the Russian market, and the product range was increased to 400 makes. More than 150 new approvals were obtained from leading manufacturers of machines and equipment, including MAN, Porsche, Mercedes, BMW and others. MAN and NOEPLAN trucks and buses received their first filling of oil. LUKOIL was also selected as oil supplier for the first filling into all Ford engines manufactured by Ford Sollers engine plant in Elabuga, Russia.
In 2016 and in the mid-term perspective the Company is planning to increase the share of high value-added products, optimize low-margin areas, and continue the import replacement program. In addition, the Company is planning to expand its supply geography and to further develop the product portfolio.