Oil & Gas

Saudi Aramco is reportedly exploring the possibility of acquiring BP's lubricant assets as part of its ongoing expansion into the refining and chemicals sectors, according to a recent Bloomberg report. Sources familiar with the matter suggest that Aramco is considering a bid for the business operating under the Castrol brand, which could involve acquiring some or all of its assets.

However, the negotiations are still in the early stages, and no final decision has been made regarding the structure of the potential offer or its continuation.

Castrol's lubricant assets are reportedly attracting attention from other potential buyers as well, with Aramco expressing particular interest in the company’s operations in fast-growing markets like India. BP has recently initiated a strategic review of the Castrol business, which is estimated to be valued around $10 billion, in line with the company’s broader institutional restructuring.

The review includes examining the potential sale or restructuring of Castrol, which is also part of BP’s plans to refocus on its core energy operations.

Saudi Aramco’s interest in Castrol could involve integrating the lubricant business with its recently acquired Valvoline unit, which was purchased for $2.65 billion in 2023. This move aligns with Aramco’s broader strategy to strengthen its presence in the global lubricants market.

The company’s focus on expanding its footprint in Asia, particularly in countries like China, India, and Southeast Asia, further supports this potential acquisition. The Castrol India Ltd subsidiary, with a market capitalization of approximately $2.5 billion, is a key asset that could offer Aramco significant growth opportunities in this region.

In addition to its interest in Castrol, Saudi Aramco has been making significant strides in its global expansion efforts. The company has made several acquisitions in the refining and chemicals sectors, including a 25% stake in Unioil Petroleum, a major fuel company in the Philippines.

This acquisition is part of Aramco’s strategy to tap into the growing fuel markets in Asia and expand its retail network. The move is expected to help Aramco introduce its brand and lubricants to customers in the Philippines, adding value to its global operations while strengthening its position in the fast-growing energy markets of Southeast Asia.