BP Faces Lower Bids in Castrol Sale, Missing $12 Billion Target

BP has initiated the formal sale process of its Castrol lubricants business, aiming to raise up to $10 billion as part of a broader $20 billion divestment plan by 2027, with Goldman Sachs overseeing the transaction. Potential buyers, including Saudi Aramco, Apollo Global Management, Lone Star Funds, Reliance Industries, and China's state-owned CITIC Group, have submitted offers reportedly below $8 billion, falling short of BP's $12 billion target necessary to boost free cash flow. Castrol, which generates around $1 billion in EBITDA and operates globally, was acquired by BP in 2000 and has become a major player in the lubricant sector. The divestment reflects BP's strategic pivot under CEO Murray Auchincloss to focus on higher-return oil and gas assets amid pressure from activist hedge fund Elliott Management to enhance shareholder returns and simplify the portfolio. While initial bids are low, significant interest from major players suggests the potential for higher offers as the sale progresses, highlighting a broader shift in the energy industry as companies adapt to evolving market conditions and sustainability trends. This transaction represents a key move in BP's financial recalibration during a volatile period for oil markets.