Since Jou’s tenure began in 2022, Castrol has pursued a vigorous growth plan in fluids for electric vehicles and data-center coolants and carried out a brand refresh in 2023. It has also maintained deep channel relationships and substantial brand equity, which typically command premium valuations in specialty downstream segments, Reuters analysis said.  

But this year, Castrol found itself caught in the crosshairs of Elliot Management, BP’s third-largest investor, which used its 5% stake to pressure the BP board to dump parts of the business, including Castrol, to raise $20 billion to recoup lost revenue. Elliott also pushed BP essentially to abandon its net-zero commitments by increasing investments in oil and gas extraction by about 20% to U.S.$10 billion a year and slashing money allocated to renewables by more than $5 billion, reported the BBC in February.  

Now Castrol is up for sale, 25 years after BP bought it. The process began in May, with Reuters suggesting the company could fetch between $8 billion and $10 billion. BP said the sale was part of “reallocating capital and driving greater focus,” amid pressure to improve returns by Elliot. That price tag, if achieved, would mean core earnings in the region of $1 billion.  

Castrol’s History 

Castrol traces its origins to 1899, when Charles Cheers Wakefield founded C.C. Wakefield & Co. in London. Tribologists at Wakefield found in the early 20th century that blending castor oil with lubricants improved performance in emerging automotive and aviation engines. The enhanced oil became known as Castrol, a name that eventually outgrew the founder’s own.  

Castor oil chemistry defined the products in the early years but it was Wakefield’s ability to identify an opportunity that set the pattern for the next century.  

“Charles Wakefield saw the growth of transport and used motor racing and other events to promote the Castrol brand,” industry consultant and former Castrol employee Jan Trocki told Lubes’n’Greases. “He was a marketer before marketing was invented. All victories, especially land speed records, were advertised and Castrol was associated with pioneers. The brand awareness was underpinned by leading technological advances and innovation.”  

Now defunct Burmah Oil acquired C.C. Wakefield & Co. in 1966 and operated as Burmah-Castrol. The brand expanded internationally and increased its visibility in motorsport before becoming a target of industry consolidation in the 1990s.  

In March 2000, BP Amoco announced a £3 billion ($4.73 billion at the time) acquisition of Burmah-Castrol, integrating Castrol into BP’s portfolio.  

Presence 

At Castrol’s core is consumer-facing passenger car and motorcycle oil sales, including its flagship fully synthetic line Edge. For trucks and other heavy-duty applications, there is an array of axle, gear and hydraulic fluids. Castrol is a heavyweight in metalworking and industrial lubrication. It has a strong presence in aerospace, marine and energy. And more recently, immersion cooling partnerships mean expansion into fluids for data centers and AI computing, which are seeing rapid growth.  

The company operates several units and joint ventures around the world, including in India. Castrol India Limited is a listed affiliate and one of the four biggest suppliers in that major growth market. In its 2024 year-end results, Castrol India reported revenue of $646.4 million, EBITDA of $154 million and profit after tax of $113 million. The division cited a market cap between $2.3 billion and $2.4 billion.  

The listed India unit’s steady profitability and dividends reflect this local-market execution and have made it a fixture for income-seeking investors on the NSE/BSE. Castrol India is led by veteran operators who balance brand, channel and OEM partnerships.  

With the average age of internal combustion engines vehicles pushing toward 12 years in Europe and the United States, Castrol’s focus on internal combustion engines is likely to carry on into the next decade and beyond.   

At the same time, the company is pushing ahead with EV driveline and thermal fluids and data-center cooling, the latter driven by AI workloads and liquid-cooling adoption curves.   

One of the company’s fastest-growing segments is Castrol ON, its EV driveline and thermal management fluids range. Diversification was also backed by substantial investments from BP. In late 2021 and 2022, BP announced up to £50 million for a global battery R&D center in the UK.  

Where Now? 

Given all of its attributes – distribution, sales channels and brand recognition to rival Coca Cola; a comprehensive product portfolio that maintains its core competency and looks forward to a world after fossil fuel transport; and an extensive global presence – observers are left wondering why there’s been no clamor to snap up the company.  

Some observers think Castrol is overpriced at the target sales price reported by the BBC. Passenger car engine oil demand is declining in North America and Europe, while Africa and Asia-Pacific can be risky. Castrol’s presence and equity in finished industrial lubes is significant but inconsistent from country to country. Unlike some of its major oil company competitors, it does not have captive base oil or additive operations from which to derive synergies.  

Most interested parties demurred early on in the process, Bloomberg reported in July. Saudi Aramco was rumored by many industry insiders to be keen, having bought the even more venerable Valvoline. India’s Reliance Industries we also mentioned, as were Apollo Global and Lone Star Funds.  

At the time of writing, the U.S.-based private equity firm One Rock Capital Partners was still equivocating and the Canada Pension Plan Investment Board only interested in a minority stake, according to Bloomberg.  

If BP completes the sale, a successful suitor may have been attracted by Castrol’s brand equity in both consumer and industrial channels, its cash generation with relatively low level of capital intensity and its solid footing in EVs and data-center cooling where fluid specifications and OEM tie-ups can create barriers to entry.  

Conversely, a buyer would have to be comfortable with the long-term decline of the all-important passenger car motor oil segment and ensure that the company’s bet on EV and data center fluids reaches global scale.   

The sale seems certain to be one of the decade’s larger deals in the specialty downstream arena. Saudi Aramco paid $2.65 billion for Valvoline. Gulf Oil Corp. acquired Houghton International for $1.05 billion.  

Industry insiders, including former employees Castrol and its rivals, can only speculate as to why the Grande Damme of lubricants is still for sale.   

“Having developed an interest in cars, motorcycles and racing in the 1960s, I’d have a difficult time not associating the Castrol brand with something that wasn’t motor sports related,” said Gene Lockard, an energy journalist based in Houston. “The brand had an excellent reputation. It’s possible that as industrialized countries move toward electric vehicles, what worked so well for the brand as an image in the past might be limiting its appeal somewhat for today’s consumer.”  

Mike McCabe, an industry marketing strategist, brand management consultant and Castrol alumni, told Lubes’n’Greases “I really don’t understand it, it’s a puzzle.”  

Simon Johns is an editor with Lubes’n’Greases. Contact him at Simon@LubesnGreases.com.