Neste Corp. (Espoo, Finland) has signed an agreement to sell its existing base oils business to Chevron Corp. (San Ramon, Calif.). The agreement covers a combination of share and asset deals forming Neste’s entire global base oils business. As part of the divestment, the parties have also agreed on a long-term offtake for Neste’s base oils supply from Porvoo, Finland. With the same date, Neste has signed an agreement to exit its base oils joint venture with Bahrain Petroleum Company and Nogaholding.
“I want to thank our people in the base oils business who have been known for their pioneering spirit throughout the years. They have built the foundation for Neste to become one of the world’s leading producers of Group III base oils, and we can be extremely proud of that. Chevron being a leading manufacturer of base oil products is therefore an excellent company to nurture and develop the NEXBASE base oils business further,” says Neste’s President and CEO Peter Vanacker.
Neste’s base oils have been produced in Porvoo, Finland and by a base oils joint venture with Bapco and Nogaholding in Bahrain. The agreement with Chevron will cover Neste’s Porvoo base oils production volumes, its premium brand NEXBASE™, all formulation coverage associated with the brand, as well as a global marketing and distribution platform. In connection with the divestment, Neste is exiting the joint venture with Bapco and Nogaholding, and will no longer have presence in Bahrain.
The parties are committed to ensuring a seamless transition to NEXBASE customers and all other stakeholders including employees. The parties have agreed that the transaction price shall remain confidential. The transaction will not have a material effect on Neste’s financial position. The completion of the divestment is subject to the approval of the competition authorities and customary closing conditions, with estimated completion date by the end of Q1/2022.
By Mary Page Bailey
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