Chevron and Brazilian oil and gas company Ipiranga have been cooperating since 2017 to produce and market finished lubricants in Brazil and neighboring countries. Now their joint venture, Iconic is also supplying API Group II and III base oils produced by Chevron and imported to Brazil.
Iconic officials emphasize that the company formed a separate unit for the base oils and that it is operating independently from the lubricant business, from a former lube blending plant that has been converted into a base oil distribution center.
The companies say they aim to supply higher grade base stocks needed to make lubricants needed for new cars and trucks. Engine oils generally need to be produced using Group II or Group III base stocks in order to provide the performance needed by the latest cars and trucks. All three of Brazil’s virgin base oil plants produce conventional Group I or naphthenic base stocks. The country imports large quantities of base oil – about as much as domestic production – most of it Group II oils from the United States.
Chevron has been among those U.S. exporters, but beginning Sept. 1 Iconic will be exclusive distributor in the country of Chevron’s Group II and Nexbase Group III oils.
Based in Rio de Janeiro, Iconic is a Chevron-Ipiranga joint venture that has supplied finished lubricants, greases and automotive coolants since 2017. Iconic carries both Ipiranga-branded lubes and products marketed under Chevron’s Texaco brand.
The new Iconic base oil business unit is operating out of a former lube factory that the company operated in Rio de Janeiro. All elements related to lubricant production have been decommissioned and the facility converted into a base oil terminal. Iconic invested to improve the site´s pipeline architecture and built new storage tanks.
Iconic officials said the base oil hub is strategically located to provide deliveries for most of the country’s lubricant players.
Iconic Base Oil Executive Manager Marcelo Guimaraes emphasized that the base oil business operates separately from Iconic’s finished lubricant business. “I do not see any competition, nor do I see distraction with finished fluid on storage tank capacity,” he said. “We are fully focused and dedicated to base oil handling, loading, unloading and transportation efficiency, and that will reflect on the quality of service that we aim to provide.”
Claiming to be the leading lubricant marketer in Brazil, Iconic offers a wide range of products that are produced at two manufacturing facilities. The Rio de Janeiro-based company develops, produces, markets and distributes lubricants, greases, and coolants.
Joint venture officials say they see base oil opportunities in Brazil because of a mismatch between the local supply base and market needs. The country has three virgin base oil plants, all of which produce conventional paraffinic Group I or naphthenic oils, but demand is shifting toward Group II and III stocks, which are needed to make lubricants used by newer automobiles. This is especially true since Brazil boasts the largest national fleet and lubricants market in Latin America.
The Brazilian lubricant market accounted for 1.28 billion liters (1.2 million tons) in 2022 and projections point toward 1.35 billion liters in 2023, according to Guimaraes, who estimates that half of the base oil in Brazil is imported and that 60% of it is premium Group II and Group III.
Besides the lubrication performance needs of new car models, Iconic said demand for higher grade base oils is also being spurred by the evolution of Brazil’s lubricant end users, who are looking for longer drain intervals and improved quality.