SAUDI Aramco is considering a potential offer for lubricant assets being sold by BP, as the Middle Eastern company pushes for acquisitions that deepen its reach in oil consuming countries, according to people with knowledge of the matter.
The world’s biggest energy company is studying whether to bid for part or all of the business, which operates under the Castrol brand name, the people said. Aramco could look to combine the Castrol assets with its Valvoline lubricants unit, which it bought in a US$2.65 billion deal completed in 2023.
As part of a major corporate revamp, BP is starting a strategic review of the Castrol lubricants business, which Bloomberg News previously reported could be worth around US$10 billion.
Aramco is particularly interested in Castrol’s operations in fast-growing markets like India, the people said, asking not to be identified because the information is private. Its Mumbai-listed subsidiary Castrol India has a market value of about US$2.5 billion.
Deliberations are still at an early stage, and Aramco has not made a final decision the structure of a potential bid or whether it will proceed, the people said. The Castrol assets are also attracting interest from other bidders, according to the people. Representatives for Aramco and BP declined to comment.
Aramco said last year it’s looking for more refining and chemicals acquisitions in Asia and sees China, India and southeast Asia as its big growth markets. Owning businesses like filling stations and lubricant manufacturers gives oil producers more sway along the energy value chain, while taking them deeper into markets where they sell their crude.
State-owned Aramco has done a string of deals for refining and chemical assets in China, and bought a stake in a company in the Philippines last month that will give it access to the retail market. Aramco is also among bidders for Shell’s service stations in South Africa, Bloomberg News has reported. BLOOMBERG
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