The shares of Castrol India today soared 11% to an intraday high of Rs 246.80 on the BSE in Thursday’s trade on reports that Saudi Aramco is potentially considering a bid for BP Plc’s lubricant business.
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Saudi Aramco is weighing a potential offer for the Castrol lubricants business of oil major BP, Bloomberg News reported on Wednesday, citing people with knowledge of the matter.
Saudi Arabia’s state oil company is studying whether to bid for part or all of the business, which operates under the Castrol brand name, according to the report.
The report added Aramco hasn’t made a final decision on the structure of a potential bid or whether it will proceed as deliberations are still in the early stage.
Later during the day, Reuters reported that BP has been exploring all options around its Castrol business, including a possible sale, as part of a strategic review.
BP said last week it was reviewing its lubricants business, Castrol, and targeting $20 billion in divestments by 2027. The divestment programme is a key part of CEO Murray Auchincloss’ strategy revamp to slash spending on renewables and increase BP’s focus on oil and gas production to enhance earnings, the news agency said.
BP, which has underperformed peers like Shell and Exxon, has come under increasing pressure to change strategy after news that U.S. activist investor Elliott Investment Management has built a 5% stake in the company.
According to Elliott, BP would benefit from selling its Castrol lubricants and its network of service stations to unlock value and boost share buybacks, Reuters reported.
Around 12:15 pm, the shares of Castrol India were trading 11.5% higher at Rs 247.85 on the BSE.
