BP wants to cash in

BP management continues to desperately try to squeeze as much money out of the company as possible. The next idea: selling its subsidiary Castrol. This transaction could likely bring the British company between eight and ten billion dollars. The hope is that this could boost the recently sluggish share price.

In its report, Bloomberg News, citing people familiar with the matter, named Saudi Arabian oil giant Aramco and Indian industrial giant Reliance Industries as potential buyers for BP's lubricants division. Private equity firms Apollo Global Management and Lone Star Funds were also mentioned as potential suitors.

BP's management team, led by Murray Auchincloss, had planned to sell assets worth nearly $20 billion by the end of 2027. Ideally, the sale of Castrol could generate almost half of this amount. Since activist investors, led by Paul Singer and his hedge fund Elliott Management, are pushing for the largest possible distributions, the sales could lead to BP using a large portion of the proceeds to keep shareholders happy with higher dividends and share buybacks. It's obvious, of course, that these plans have relatively little to do with a sensible long-term strategy.