BP Considers Selling Castrol Amid Shift Back to Oil & Gas

BP launches a strategic review of its lubricants business as it refocuses on fossil fuels

In a latest news article in F+L Asia, UK-based energy giant BP has initiated a strategic review of its global Castrol lubricants business, with a potential sale under consideration. This move is part of BP’s broader plan to divest USD 20 billion by 2027 while reinforcing its commitment to oil and gas investments. Industry analysts estimate Castrol’s sale could bring in around USD 10 billion, strengthening BP’s balance sheet.

BP acquired Castrol’s parent company, Burmah Castrol, in 2000 for USD 4.73 billion, gaining control of one of the world’s most recognized lubricant brands. Castrol has since operated as a wholly owned subsidiary, supplying automotive, marine, industrial, and energy sector lubricants across 150+ countries. However, with BP’s latest strategic reset—announced on February 26, 2025—the future of Castrol within BP’s portfolio remains uncertain.

A Shift in Strategy & Pressure from Elliott Management
Under CEO Murray Auchincloss, BP is significantly increasing oil and gas investments to USD 10 billion per year while slashing spending on renewables by USD 5 billion. This move aligns with growing pressure from activist investor Elliott Management, which has pushed BP to prioritize high-margin fossil fuel businesses over lower-return renewable energy ventures.

Kwinana Biofuels Project Put on Hold
BP is also delaying its Kwinana Renewable Fuels project in Australia, initially planned to produce sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO). This decision reflects ongoing market uncertainties and BP’s focus on capital efficiency.

With Castrol’s fate hanging in the balance and BP’s biofuels initiatives on hold, the company is making it clear: for now, oil and gas remain the top priority.