INSIGHT: Oxea acquisition drives Oman’s petchems downstream

14 October 2013 16:52  [Source: ICIS news]

By Nigel Davis

An oil pump in OmanLONDON (ICIS)--Before its primary petrochemical units are on the ground in the landmark project in Duqm, Oman has stepped in to acquire expertise and production capabilities that drive it straight towards the end consumer.

State controlled Oman Oil Company (OOC) said on Thursday (10 October) that it had agreed to buy oxo chemicals producer Oxea from private equity group Advent International.

Oxea is the world’s number two oxo derivatives maker and the world’s largest merchant seller of oxo products. BASF is the world’s largest producer of oxo alcohols.

The acquisition gives Oxea access to ethylene and to growing markets in the Middle East and Asia. It gives Oman Oil direct access to a wealth of oxo process technology and a broad oxo products base.

Oxo products are widely used intermediates in many sectors of industry being links in the chain of materials synthesis that runs downstream from the cracker towards coatings and consumer products, including detergents, flavours, fragrances, and lubricants.

Oman’s purchase of Oxea taps it straight into a wealth of process and market know-how developed over the past three quarters of a century. The demand for oxo products has increased with rising consumer spending. Output has almost doubled in the past 20 years.

Oxea is a company created by private equity from businesses which originated in former industry majors like Germany’s Hoechst and Degussa.

It was created in 2007 from what was then the oxos business of Celanese (formerly a part of industry giant, Hoechst) and a Celanese joint venture with Degussa (today, Evonik).

Under Advent, the business has reportedly flourished and the product portfolio expanded towards high-margin oxo derivatives.

Those derivates are the aldehydes, alcohols and ketones vitally important in downstream chemicals and materials manufacture.

The process to make them, hydroformulation, was celebrated this year, the 75th anniversary of the filing of a patent for the ‘oxo’ process by German chemist, Otto Roelen, then research director with Ruhrchemie. Roelen’s work on hydroformulation set the stage for the development of industrial-scale organometallic chemistry.

The process enabled the production of aldehydes from olefins and opened up synthetic routes to alcohols and other oxo products. The anniversary was commemorated in Germany in late September with a symposium at Oxea’s Ruhrchemie plant where a plaque was unveiled.

Oxea, as created by Advent, has a broad portfolio of more than 70 oxo chemicals with operations in the in the Americas, Europe and Asia and a production capacity of 1.3m tonnes.

“This acquisition will expand OOC’s downstream portfolio by bringing world-class technology and know-how to Oman through existing assets and new investments,” the Oman Oil Company said.

“With the acquisition of Oxea, OOC aims to become a vertically integrated global chemical leader in the downstream industry,” it added.

“Oxea is an impressive company with a strong track record, highly diversified product portfolio, multistep value chain and strong customer base,” said OOC chairman and undersecretary of Oman’s oil & gas ministry Nasser bin Khamis Al Jashmi 

“With its international presence in Europe and North America, leading technology, efficient platform and longstanding experience in the Oxo segment, Oxea will support our further expansion into the chemical sector,” he added.

Oxea is seen as a cornerstone in the integrated chemicals platform Oman is trying to create from its investments in Duqm, Philippe de Fitte, Vice President Downstream Strategic Business Unit of OOC, said.

The link to Oman will aid Oxea’s expansion strategy, especially in growth markets in Asia while OOC would benefit from Oxea’s reach into European and North America markets, he added.

“It is necessary to continue enriching the national economy through strategic ventures that have the right mix of technology and knowhow,” Al Jashmi said. “This is a monumental step for Oman Oil Company as we continue to expand our global footprint while positioning the Sultanate in the international arena.”

And, having worked with Advent, Oxea executives say they are convinced of the synergies with what will one day be ethylene rich Oman Oil and the access to markets in Asia and the Middle East that the new owners may provide.

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By: Nigel Davis
+44 20 8652 3214

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