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Passenger Car Engine Oil Developments Yesterday, Today, Tomorrow - - PowerPoint PPT Presentation

Passenger Car Engine Oil Developments Yesterday, Today, Tomorrow Sven Hooijer Shell Global Solutions 20 September 2016 1 DISCLAIMER The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities.


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Passenger Car Engine Oil Developments Yesterday, Today, Tomorrow

Sven Hooijer Shell Global Solutions

1 20 September 2016

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DISCLAIMER

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 34% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2011 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, March 20th, 2012. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We may have used certain terms in this presentation that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330. 20 September 2016 2

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Our route for today

  • Global Energy Demand
  • Global Mobility
  • Changing Climate for Base Oils and Additives
  • Lubricant Specifications
  • Industry Challenges

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ENERGY CHALLENGE 2050

GLOBAL POPULATION 9 BILLION ENERGY DEMAND +200% PEOPLE IN CITIES 75%

2050 9 BILLION 2014 7 BILLION

2000

2050 50%

75%

THE ENERGY CHALLENGE – ENSURING SUPPLY TO 2050

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THE NEW ENERGY FUTURE FOR 2050

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Rising energy demand, supply pressure, climate change

9 billion people, 75% living in cities (2 billion more than today) 2 billion vehicles (800 million at the moment) Many millions of people will rise out

  • f energy poverty;

with higher living standards energy use rises Energy demand could double from its level in 2000.. .. while CO2 emissions must be half today’s to avoid serious climate change Twice as efficient, using half the energy to produce each dollar of wealth 3 times more energy from renewable sources

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THE EVOLUTION OF THE WORLD’S ENERGY SYSTEM FROM 1800 TO TODAY http://www.shell.com /careers/life-at- shell/importance-of- innovation/carbon- neutral.html

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TOTAL PRIMARY ENERGY DEMAND FORECAST FROM SHELL ENERGY SCENARIOS

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Why lubricants can make a difference ...

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  • Reduce friction and wear

form a film between surfaces prevent contact/sticking

  • Viscosity is key

Lower viscosity requires less energy/fuel

  • Understand other keys for success
  • Enable new technology for emissions reduction

CHALLENGE: LOWEST VISCOSITY FOR PROTECTION AND DURABILITY OF DRIVELINE COMPONENTS

Fuel Economy Engine Durability Faultless Operation Emission Control

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Challenges in engine technology: more complex & divers

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FUELS OPTIONS: DECARBONISATION

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Drivetrains, fuels and Lubricants ... … past, present and Future

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Renewable Electricity & Hydrogen?

?

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Challenges for future mobility – Need for collaboration

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Significant changes in raw material availability/applicability

Base Oils Over the last years; optimization of refining landscape (different balance of products), reduction of complexity and change in overall raw material availability. Fundamental changes;

Due to commercial and technical aspects, the production of Group I base oils decreased

considerably.

Rapid growth of Gp II and Gp III base oils due to stringent technical requirements. Overall change/reduction in base oil cuts.

Future viscosity grades are demanding different base oil blends. Changes in global demand/volumes will have direct impact on base oil availability. Pressure on the use of alternative raw materials (bio materials, esters, …)

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Significant changes in raw material availability/applicability

Chemistry (Additives) The search for new components will continue (due to regulations and/or specific characteristics of new materials). Directly influenced by REACH and the new global harmonised system (GHS) New materials are directly influenced by REACH (high costs – broader application) Some industry observations;

  • Due to emission regulations we moved from full SAPS to lower SAPS
  • Introduction of surface coatings (DLC, polymers, etc…)
  • Rebalancing of additive systems (LSPI)
  • New viscosity modifiers for specific application in fuel economy (latest lower viscosity grades

need less VM)

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Global and OEM specification requirements

  • OEM specifications are better reflecting the industry requirements and demands as compared to the

available global specifications.

  • Rapid changes in the industry
  • API facing multiple difficulties
  • ACEA could also face difficulties
  • New requirements and thinner viscosity grades are demanding good understanding of the applicable

tribo system and lubrication regimes.

  • The lubricant is part of the tribo system
  • Optimization of the tribo system requires cooperation with OEM and/or engine part manufacturer.
  • Detailed understanding of the interaction of lubricants with the surfaces in the application are

required to develop modern lubricants. (optimum FE, “new” coating materials, new construction elements, new additives).

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Looking back a while ago………..specification development

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API SH ACEA 2000 API SG CCMC G4/5 API SJ VW 502 VW 503/506

1984 1986 1988 1990 1992 1994 1996 1998 2000

CCMC G1/2/3 API SL MB 229.1 MB 229.3 MB 229.5

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…. towards today………what’ s next……..

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2004 2008 2012 2016

ACEA 2008 ACEA 2010 ACEA 2012 ACEA 2016 API SL API SM API SN VW 504507 VW 504507 FE VW 508509 BMW LL-01 BMW LL-04 BMW LL-12FE BMW LL-14FE+ BMW LL-01FE VW 5088850999 MB 229.31 MB 229.51 MB 229.52 MB 229.6 MB 229.71 RN0730 RN0710 RN0700 Porsche A40 Porsche C30

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Specification development

  • Despite the existence of the ACEA and API specifications, OEMs are facing continues challenges in

their developments. They need to ensure that no technical issues will occur. Therefore new requirements/specifications are introduced.

  • The increase in requirements in the industry and the increase of OEM specifications
  • Will increase complexity in product development.
  • Will increase the amount of products.
  • Will increase complexity in logistics.
  • Will increase the variety of additives.
  • Will increase cost.

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ACEA specification developments – main changes

  • New ACEA 2016 specifications expected to be released later this year ………
  • New ACEA C5 category
  • Several new tests and severe test requirements – main changes
  • Piston cleanliness: CEC L-104 – OM646 bio
  • Engine sludge: CEC L-107 – M271EVO – when fully approved by CEC
  • Dispersion/KV increase: CEC L-106 - DV6C
  • Piston cleanliness: CEC L-111 – EP6CDT
  • Replacement of TU5 hardware.
  • New seals materials and limits (CEC L-112)
  • (Under discussion; Seq IVB (replace TU3), Ford chain wear, Ford LSPI)

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Engine lifetime and developments ACEA-OEMs - 1

Daimler

  • OM 646LA – available till end 2018 (could be extended)
  • OM 646 bio – now available, initial availability till end 2018 (could be extended)
  • M271 evo – test development not completed
  • M111FE – availability till end 2016, no replacement
  • New LSPI engine……
  • New aeration test…..
  • New M254 engine for 2020 (Challenge 2020 project)

BMW

  • Introduced new N20 engines and Bx8 gasoline engine, model year >2014

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Engine lifetime and developments ACEA-OEMs - 2

VW

  • VW TDi – availability expect to end Q4-2017, new VW development
  • New diesel sludge test, EA189, 2l TDi with B30 SME
  • New T4 engine test, EA888
  • New RNT test, EA211 wear test
  • New piston cleanliness test, EA211 with poor fuel quality

Peugeot

  • TU3 – availability ends end 2016, replacement by API test engine (seq IV) ?
  • EP6CDT – available now
  • DV6 – available now
  • LSPI test……..

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Engine lifetime and developments ACEA-OEMs - 3

GM

  • Turbocharger test
  • Pre-ignition
  • Aeration
  • New FE test

Ford

  • VG – availability ends 2018 lates

One learning, it could well be that several tests will not be available till the life end of the ACEA 2016 specifications.

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API specification developments

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Many new tests are in development for the new category!

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API specification developments Engine Tests GF-5 Current Test Life

  • Seq. III (oxidation & deposits)

X Q3/Q4 2016, IIIH will replace at same(?) limits.

  • Seq. IV (valve train wear)

X Unlimited (2020?) IVB to be used for GF-6

  • Seq. V (sludge & varnish)

X Q1 2017, VH to replace

  • Seq. VI (fuel economy)

X Q3/Q4 VIE/F to replace

  • Seq. VIII (corrosion)

X Unlimited

4 of 5 tests for GF-5 threaten to become unavailable!

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Performance demands from OEMs

  • Certain OEMs (VW, BMW, Daimler, GM) still require high level of durability, however at the same

time they are demanding the highest possible fuel economy for their lubricants.

  • This in combination with good protection of their TC (all OEMs – however limited testing available)
  • Due to engine downsizing – new LSPI requirement(s) (Daimler and GM)
  • Due to changes in hardware applications(s) – timing chain wear protection (VW, Daimler, GM and

BMW?)

  • After treatment is important for all OEMs.
  • Due to the introduction of polymer surface coatings and DLC, new requirements for lubricants will

further develop.

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Fuel Economy

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  • “New” viscosity classifications; 8, 12 and 16
  • Lower viscosities have been contributing to better fuel economy properties
  • However lower viscosity grades are different;
  • Can be formulated with less viscosity modifier
  • Will move closer to mixed and boundary lubrication regimes.
  • Impact and differences between NEDC and WLTC
  • Possible ways forward to achieve better fuel economy/compensate detrimental effects
  • New/alternative anti wear agents
  • Addition of new/alternative friction modifiers
  • Co-engineering with OEMs (DLC, coatings)
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LSPI

  • Better efficiency and fuel economy via downsizing,

turbocharging – high load and low engine speed promote LSPI

  • LSPI is a constraint which prevents optimization of

engine torque at low speeds

  • Phenomenon causing ignition of fuel-air mixture prior

to spark

  • Causes power loss, increased heat transfer to engine

components, and/or engine failure

  • Hardware, Fuel, and Lubricant factors influence LSPI
  • Several mechanisms could be responsible for LSPI

(oil droplet, oil vapour, hot particles)

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Engine Fuel Lubricant

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Aeration

  • Multiple factors can influence aeration in an engine; engine speed, temperature, design ; oil level,

viscosity, pressure; oil ageing, oil formulation (base oil and additives)

  • Oil level
  • Too low oil level – risk of air being sucked up into the oil pump
  • Oil temperature
  • Increasing temperature – gas dissolved in the liquid combines and forms bubbles in the oil.
  • Oil pressure
  • As the oil pressure raises, so does the amount of air it can absorb (air solubility). With a drop in

pressure, a portion of the dissolved air will become bubbles and considered dangerous for the engine.

  • Pump cavitation, filter blocking, vibration, loss of horsepower, ………

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Discussion

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  • The world is rapidly changing in regard to energy demand, resources and energy

availability.

  • Mobility is an important topic that will remain under discussion for the next decades.
  • More challenges in engine technology – more complex and divers.
  • Lubricants will continue to play an important role to contribute to emission reduction.
  • Due to a rapid changing industry, industry specifications will continuously be under

pressure.

  • OEMs will continue to develop their hardware, resulting in new specifications.
  • A lubricant is part of the tribo system; early involvement with OEM development activities

will be more and more required.

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Discussion – cont’d

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  • Formulation of PCMO engine oils has significantly changed over time.
  • Landscape of specifications related to industry trends has become larger and complex
  • Increased complexity in the availability and types of base oils in the industry
  • Additive chemistry has been broadened and existing base of certain additive components

has become more divers.

  • More demanding and complex requirements for automotive lubricants.
  • Continuously changing specifications will;
  • Increase complexity in product development
  • Increase overall amount of formulations
  • Increase overall cost
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Questions and Answers

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