Fuels & Lubes International 2001 – Issue #6

OPEC Sec-Gen says member countries investing in Asia’s future
KUALA LUMPUR — Addressing the 7th Asean Council on Petroleum (ASCOPE) meeting here in November, Secretary General Ali Rodriguez Araque of the Organization of Petroleum Exporting Countries (OPEC) said that while the region’s appetite for energy consumption is projected to increase significantly in the years ahead — thereby providing opportunities for the supply of large volumes by OPEC member countries — experience from Asia’s economic and financial turmoil of the recent past has taught us that “the vulnerability factor could be lurking around” and therefore “must be kept at bay.”

After 15 years, China enters WTO
On September 17, the World Trade Organization concluded negotiations on China’s terms of membership in the WTO, paving the way for the text of the agreement to be adopted formally at the WTO’s 4th Ministerial Conference in Doha, Qatar, in November.

Marican: National oil companies are transforming themselves into business-driven entities
By Vicky Villena – Denton
KUALA LUMPUR — National oil companies are perceived to be uncompetitive, bureaucratic, technologically inferior and not cost effective, noted Petronas President and CEO Mohd Hassan Marican at the 7th Asean Council on Petroleum (ASCOPE) meeting here in November. ASCOPE is one of the several active sub-groups of the ASEAN organization.

After terrorist attacks, jet fuel demand takes a sharp downturn
By Ronald Tharby
The terrorist attacks in New York and Washington on September 11 grounded all North American civil air activity for two to three days and affected aviation operations elsewhere around the world. Civilian jet fuel demand dropped to near-zero during that period but now that civil aviation operations have resumed, major reductions in jet fuel demand are becoming apparent since most of the large U.S. air carriers have announced schedule reductions of around 20% due to reduced traffic loads.

Jet fuel formed kerosene mist cloud upon impact
By Ronald Tharby
Some aspects of aviation kerosene properties which contributed to the September 11 disasters are firstly, that the jet fuel kerosene formed a substantial mist cloud immediately on impact. Secondly, aviation kerosenes like Jet A — which was being used — have a very high energy density, around 43MJ/kg (18,400 B.Th.U/Lb) minimum, so there is a very large energy content in a roughly 10,000USG load which would have been about the amount carried for a U.S. transcontinental flight in these aircraft.

Partners sign agreement to submit JFS for Fujian venture
In the wake of China’s accession into the WTO, the three partners in Fujian Petrochemical Co. Ltd. (FPCL) jointly signed the agreement to submit the joint feasibility study (JFS) for the Fujian integrated petroleum/petrochemical project.

China’s entry into the WTO: Implications for Foreign Oil Companies
If you’re a foreign oil company seeking opportunities in China post-WTO, expect a bumpy trip into the world’s largest market.Local and provincial government policies are not always consistent and lack predictability. Additionally, Chinese oil firms’ expertise and capitalization lag behind world standards, which could be frustrating for a foreign company joint venturing with a local one.

Conoco, Phillips Petroleum meger called “a merger of equals”
Conoco Inc. and Phillips Petroleum Company announced in November that their boards of directors have unanimously approved a merger of equals, and that the companies have signed a definitive merger agreement. Conoco Inc. had $27.7 billion in assets while Phillips Petroleum Company had $35.4 billion.

Opportunities and challenges in marketing ang trading in the Asia-Pacific region
By David Fitzsimmons Presented at the 7th ASCOPE Conference, Kuala Lumpur, November 2001
The scale and scope of energy markets are changing. My thesis is that energy markets are working. Supply and demand is being balanced. Risks are being managed. Whether we look at the events of the last few weeks, or the U.S. gas market last year, or take a 30-year perspective, the story is the same.

Anti-shudder properties of automatic transmission fluids
By Tom Kiovsky
In recent years, the slip lock-up clutch system has been adopted widely because of its enhanced fuel efficiency. For such a transmission to function properly, the working fluid must exhibit friction properties within a narrow range. Various tests, both laboratory and vehicle, have been developed by automobile and transmission manufaturers to evaluate these fluids. A sub-committee of the International Lubricant Standardization and Approval Committee (ILSAC) has evaluated test methods and has reported its results in a paper, “Anti-shudder Property of Automatic Transmission Fluids — A Study by the ILSAC ATF Subcommittee,” (SAE 2000-01-1870) by Y. Murakami of Nissan and nine other authors. The authors represent General Motors, Ford, Daimler-Chrysler and the major Japanese automobile companies.

ENOC enters East African lubes market
Emirates National Oil Company (ENOC) is now marketing in East Africa. It recently signed a sole distribution agreement between its subsidiary ENOC International Sales Limited (EISL) and Uganda’s Nam Enterprises Limited.

FAA aircraft fuel tank inerting study does not recommend nitrogen inerting
By Ronald Tharby
Since 1990, there have been three incidents involving jet airliner aircraft fuel tank explosions resulting in very substantial loss of life. There were respectively a Boeing 737-300 (Philippine Airlines) which exploded on the ground in Manila in May 1990, resulting in eight deaths and 35 injuries; a Boeing 747-100 (TWA 800) which exploded in flight off Long Island, New York, in July 1996, killing all 236 on board and a Boeing 737-400 (Thai Airways) which exploded on the ground at Bangkok airport in Manila 2001, killing one flight attendant.

Gasoline contamination problems get industry attention
By Ronald Tharby
Consumer field problems arising from both particulate contamination and also materials incompatibility affecting retail automotive gasoline in North America were discussed at recent industry committee meetings in Canada and the U.S.A. These incidents have led to a significant level of customer complaints and additional warranty claims for some of the U.S. OEMs.

Conoco goes after select market segments
By Ng Weng Hoong
A year after it began implementing its market-building strategy in the reign, Conoco has started blending its Hydroclear-brand of lubricants at a Singapore plant in a third-party deal. The products will be sold to customers in the region, replacing imports from the company’s U.S. facilities.

The future of the diesel engine
By Joe Colucci
The future of the diesel engine and diesel fuel loomed large at the September 2001 Hart World Fuels Conference held in Washington, D.C. Keynote speakers, Jerry Thompson, Sr., VP of Citgo and President of the National Petrochemical and Refiners Association, Josephine (Jo) Cooper, President of the Alliance of Automobile Manufacturers, and Sherril West, vice president of R&D at Caterpillar, stressed the importance of the diesel engine to their industries and to the nation.

Boutique gasoline fuels causing distribution, storage problems
Bruce Heine, manager of Government Affairs at Williams Energy, outlined the distribution and storage problems created by the proliferation of “boutique” gasoline fuels. He said it would get worse as “boutique” diesel fuels come into use.

Coalitions seeks revision in EPA’s diesel sulfur rule
A broad coalition of petroleum industry trade associations representing refiners and marketer filed a brief in October, asking the U.S. Court of Appeals for the D.C. Circuit to send the U.S. Environmental Protection Agency’s diesel sulfur rules back to that agency for revision. The associations are concerned that the rule, as written, will lead to shortages of diesel fuel beginning in 2006. EPA’s rule requires a 97% reduction in highway diesel fuel sulfur levels by mid-2006.

What will be the future fuel to power fuel cells?
A panel discussion on “What Will Be the Future Fuel to Power Fuel Cells?” at the Hart 2001 World Fuels Conference in Washington, D.C., recently, brought out the differing positions of the automakers.