Venezuelan President Hugo Chavez on Sunday authorized nationalization of Venoco, the nations largest independent lubricants blender, according to a statement on his official news blog.
The statement said the move came following a recommendation from the South American countrys energy and petroleum ministry and the government-owned Petroleos de Venezuela S.A., which controls all domestic base oil supply and limits the amount available to independent blenders. In the blog post, Chavez claimed bringing Venoco under government control will result in lower lubricants prices.
On his weekly television and radio show Sunday, Chavez stated the forced acquisition of Venoco would take effect when the decree is published in the countrys official gazette, the Associated Press reported Monday.
Lube Report was unable to reach Venoco for comment by press time.
Venoco President Ricardo Barreto recounted the companys history and outlined the Venezuelan lubricants market during a presentation at the ICIS Pan-American Base Oils & Lubricants Conference in New York in December 2008. At that time, Venezuelas lubricants market totaled about 290,000 metric tons per year, with 68 different brands and 27 lube blending plants. PDVA held 36 percent of the market, followed by Venoco with 21 percent, Shell with 7 percent, local blenders Inca and Puramin with 6 and 5 percent respectively, and Texaco with 3 percent. Small companies accounted for the remaining 22 percent.
Venoco was inaugurated in June 1960. At that time, lubricants were imported, except for straight grades of oils. By 1963, Venoco was the first Venezuelan company blending and packaging a full line of automotive and industrial oils, and was custom blending for Valvoline, Esso, Shell, Mobil, Phillips 66 and Amalie. By 1963, Barreto said, Venoco had 5 percent of the countrys lube market.
The two decades from 1973 to 1993 were a period of nationalization in Venezuela, with the state holding a monopoly on marketing all hydrocarbon-related materials. Venoco survived by blending for the state-owned companies and was able to keep and protect its brand through exports, local sales of synthetic-based lubricants and sales of non-lubricant products such as chemicals and solvents, which made up 64 percent of Venocos tonnage in 2008.
The open market period beginning in 1994 brought the relaunch of Venoco lubricants. In 1995, Venoco entered a joint venture with Mobil to manufacture grease and lube oils. Venoco bought back its equity from ExxonMobil in 2007, when ExxonMobil sold its Venezuelan assets.