BP has officially kicked off the sale of its 124-year-old Castrol lubricants division, a cornerstone of its portfolio, aiming to fetch 8–10billion∗∗aspartofabroader∗∗8–10billion∗∗aspartofabroader∗∗20 billion asset disposal plan to slash debt and placate disgruntled investors. Goldman Sachs is orchestrating the auction, with Saudi Aramco and private equity firms among likely bidders, according to sources familiar with the matter.
Why BP Is Selling
💰 Debt Reduction: BP aims to raise $20 billion by 2027; Castrol could deliver half that target.
📉 Shareholder Pressure: Activist investor Elliott Management is pushing for cuts after BP’s stock fell 25% in a year—double Shell’s decline.
🛢️ Strategic Shift: CEO Murray Auchincloss is refocusing on oil & gas, trimming renewables spending.
Castrol’s Value & Appeal
🏆 Global Brand: The #3 standalone lubricants business (after Shell/ExxonMobil) operates in 150+ countries with Formula 1/WRC ties.
💵 Valuation:
- 1B2024EBITDA∗∗couldcommand∗∗1B2024EBITDA∗∗couldcommand∗∗8–10B sale price (Bernstein estimates up to $11B).
- BP paid £3B ($3.6B) for Castrol in 2000—a potential 3x return.
🛢️ Aramco’s Interest: The Saudi giant eyed Castrol earlier, seeking downstream diversification.
Broader BP Divestments
🔹 Lightsource bp: 50% stake sale (shortlist by July).
🔹 Gelsenkirchen refinery: On the block.
🔹 Austria mobility biz: Also up for sale.
Market Reaction
📊 Shares Flat: Investors await proof of execution after BP’s $1.5B in deals so far.
⚡ Activist Watch: Elliott demands deeper cost cuts and management changes.
What’s Next?
- Bidder Due Diligence: Private equity and strategics (e.g., Aramco) to review materials.
- Timeline: Deal likely by early 2026 if valuation expectations hold.
- BP’s Pivot: More asset sales expected as renewables budget shrinks.