Member Info for getafgrip

MoY - On the face of it this is a really difficult question. You have to look at, and value, Castrol's heritage, brand name, position in the markets etc.

But, in reality, whether Castrol is my favourite brand of oil or not is completely irrelevant. Strategically, Shell would simply put Castrol under the microscope of Wael Sawan & the CFO Sinead Gorman & the answer they were seeking would be - "what is the contribution to the bottom line," subsidiary questions might fall out of this - "what are the competitive marketplace dynamics," is it a good fit with strategy, which is becoming heavily biased towards vertical integration from upstream down to say the point at which it goes out to cosmetic companies, fertiliser companies etc.

For Sawan it would be purely a financial decision. The wider Board would just rubber-stamp Sawan and Gorman's judgement. In my view Sawan is a genius at work, mortals would need to be sure of their arguments to the contrary. If Shell takes over BP, loyalists and traditionalists will need to brace themselves for a seemingly dazzling & bewildering flurry of disposals! BP is currently a virtually rudderless strategic mess!

WP - a few of us could be crying into our beer over this.

It reminds me of finance lecture that I attended years ago. It was just after Michael Edwardes had taken over at British Leyland - people forget that some of our best industrialist brains had a shot at doing something with British Leyland!

In his autobiography Michael Edwardes stated that one of the first things he did was gather together his senior managers, and he said words to the effect that amidst all this dross, including Allegros, Princesses, Rovers, Maxis etc they had one outstanding gem the Mini! He then asked them how much they were making on each mini sold.

There was a great deal of shaking of heads. The senior managers simply did not know! He told them to go away and not come back until they had an answer!

When they had priced every component, labour and overheads, they informed Edwardes that they were losing money on every car they sold!

They should have asked Ford, because like all major car manufacturers their engineers reverse engineered almost every product that their competitors had in the market place & they knew that British Leyland was losing money on every mini they sold. It was the reason that they did not introduce the Fiesta as a small car for a number of years, they just let BL lose money on every sale.

Sir John Harvey Jones the noted consultant always said that the British economy could not flourish on the basis of us all selling beefburgers to each other! Personally I hope Jim Ratcliffe at INEOS buys Castrol , simply because he knows what he is doing!

many seem to love the imminent sale of castrol. what is castrol - a british, world-leading, cutting edge, specialist lubricants business, totally focused on the industry it arguably leads, continuously innovative & dynamic, leading the charge away from pure fossil fuels towards synthetics! there is little surprise that with the current bod myopics in charge, that there is not a great deal of symbiosis with bp's trashed reputation as regards the perception of the quality & tradition of the company and its products.

i am no motor vehicle technician, but when i put on my very badly battered & worn, castrol lubricants special baseball cap, that i got free with a can of oil decades ago, my cars and bikes know that i mean business & like popeye with his can of spinach, in my very pictorial imagination i am in the f1 pits at monaco!

i have been proudly & obsessively, personally, putting castrol lubricants in my cars and motorbikes since i was 15-years of age. a good few decades! the company is an easy sale, with people very surprisingly surprised at the value of the company amongst more knowledgeable industrialists & investors, but make no mistake it is selling the family silver to pay to help pay for dividends and buybacks, which cannot be sustained by current trading levels!

in the automotive side british aerospace sold off rolls royce cars, because iit did not fit with their business model - but it is open to conjecture & board interpretation whether rolls royce was about british excellence of engineering or multi-national excellence of aerospace engineering. after a quick game of pass the parcel - volkswagen bought the rights to manufacture cars that looked to all intents and purposes like rolls royce's but critically not the rights to the greatest name in world engineering! a quick and embarrassing bit of swap engineering with bmw, and britain managed to get rid of two superfluous and unwanted engineering names in rolls royce and bentley!

if you are not ****** please look away now! rolls royce and bentley are now german companies! airbrushing history, the battle of britain was fought by german engines on one side, and engines fated to become german on the other! mg is chinese! range rover, & jaguar are indian! john bloor - a property developer, completed a land deal at meriden & found that the land deal somehow included the manufacturing rights to the triumph motorcycles name, and to the eternal, unreserved gratitude of motorcyclists across the world started manufacturing british motorcycles again by accident! worldbeaters in cyber security like darktrace are now us companies! rowntree's and cadbury are no longer british! and now castrol looks like going to arabco!

the prospective sale of castrol is humiliating, a looney legacy! it is for sale because bp was incapable of building on a great british brand developed over a century & because it has a greater value than a company that just started up - pixie dust & angel f-a-r-t-s to e

The latest date for starting to raise the Bayesian is now the 20th April 2025. At this rate the Titanic will be running scheduled services across the Atlantic again before the Bayesian breaks the surface!

PANG - I quite like the weather report, but it needs to be linked to something a bit more tangible and even at a stretch BP related! Maybe contributors could link the "cold sunny morning" with their estimate of fuel oil consumption in the area!

As in Tynemouth is cloudy with occasional bursts of sun, with intermittent showers of rain, very cold rain, and sleet! Although it is cold and inhospitable heating oil consumption hovers around zero, because Geordies are notoriously tight with their money, unlike us Yorkshiremen who are world-famous for their extravagance!

It is worth asking why Shell brought its Capital Markets Day forward by fully 3-months from expectations of it being held in June 2025. It is the perfect platform to announce something big happening & if a merger or takeover of BP was in the offing this could be chosen as the communication/publicity event - the onus is on Shell to make any announcement.

Some of the more intellectually & educationally challenged posters seem to be substituting kindergarten name-calling for rationally argued views, when they are faced with even mildly complex analysis, interpretation and assessment. It might be usefully constructive & positive to call a halt to calling contributors "simpletons," statements like "find yourself a brain," & describing other contributors as "clueless" - especially when you are bragging that you have held BP shares for well over a barren decade & more barely managing to exceed inflation in terms of return!

https://uk.finance.yahoo.com/news/shell-hold-investor-day-march-123532497.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuYmluZy5jb20v&guce_referrer_sig=AQAAAJy2UqlPSvHk9QeTy3XuPuqNY6yFFughnXjMXGNxNvK7DEoEu3UoKmo9S4A4h8Dl0LB08Z-8HgyovkDm2sp5lPcPdOkvczcrFiGo8uBAr9b3d3xb_wI9KNjqsR0lc0Pq0410lwKiMf3fWM8VilKsnGPJfkpa3g1nKDLx-0Bjjbdp

Laura - keep on posting. You are in danger of injecting some sense of factual reality into this Board!

MoY,

Shell is already well advanced into a program of divesting 500 service stations a year from an estate of12,500. Give it a few years and they will be BOGOF! Fill up with petrol 10 x and you are entered in a competition to win the station of your choice!

The shares in Treasury reinstate their voting rights on re-issue. The Board can parcel up the shares and let a predator have them or give them to BP staff who would be likely to vote in favour of BPs decisions.

In a takeover the fate of Treasury shares are often not decided until the later stages of a bid, but without changing ownership a Board will often state that the shares held in Treasury will support the predators bid or whatever! So that with no voting powers they effectively cast a vote. It is about control!

LI - I largely agree with what you say. But the destiny of the shares bought back into Treasury are completely under the control of BP, unless a successful takeover enables the predator to force the purchase of remaining shares, to mpo thinks up as it were.

BP can do anything within its Articles of Association with the shares. And they can change the Articles of Association with Board approval at any point they wish, bending with any storm as it were. They can cancel the shares, re-issue them, or indicate that they wish to sell them to a predator etc as they choose. No company is going to cancel shares and then issue new shares to enable a staff incentive scheme -they simply re-issue them.

I find it baffling that anyone thinks that buying back large numbers of shares and placing them in Treasury has no impact on the share price or value of the company. Obviously the impact depends on the number of shares involved, but even when it is an incremental impact it does not stop the impact having an effect.

Buybacks purchase the shares in the market - most will agree that this will move the share price up or at least support the SP. Buybacks are restricted by authorities because they are effectively a legal support operation. They are actually taxed in the US.

The shares are effectively neutered in Treasury, not being able to vote etc. So that they are realistically temporarily cancelled, until the Board decides what to do with them. But they remain totally in the control of the Board. A takeover is all about control and if you could place say 5% of a companies shares in Treasury there is a double effect because a predator does not have this 5% of the company. Takeovers are decide very often on fine margins & this might be part of a nascent, likely feeble, and pedantic defence strategy by Auchinloss BP is in play right now!

I have no intention of fully explaining how buying shares in the market & placing them in Treasury impacts the share price and value of BP, but leave you with two thoughts. Does buying shares in volume usually increase the share price and does creating an artificial shortage of shares in a company likely increase the share price?

With a market capitalisation of £64.57 billion the visible impact of having say £300m held in Treasury shares will be obscured, but that does not mean that the effects on the value of BP do not exist!

An interesting aspect of this is what the following state, as the shares bought back into Treasury, if they still carry voting rights may be used to defend BP against a predator or indeed be voted in favour of a takeover:

Articles of Association:

Public document, lodged at Companies House, outlines how the company will be run.

Shareholders’ Agreement: Private contract between shareholders, sets out rights and responsibilities of shareholders, and improves relationships between them.

Both documents cover voting rights, decision-making, share sales, and other operational aspects. Essentially the Treasury held shares are a relatively small block - with takeovers though the outcome can balance on a pinhead sometimes - size matters!

Moy - they remain shares in Treasury under the beneficial ownership of BP, and will be used at Board direction for the benefit of the company, until control and ownership changes.

If a new owner takes over BP, they will generally abide by at least the spirit and direction of any clauses & restrictions that existed under BP's tenure of ownership. Effectively, though if a new company came in and offered 10 shares in their company for every 5 BP shares say, the BP shares would become shares in the new entity and with this there would be a drift towards the policy & intentions of the new entity.

Not brilliantly explained, but if BP intended originally to give 10 shares from Treasury to every employee of BP, the new entity night have a policy of giving 3 new shares to engineers only say & they might decide to continue with this. So that the original intentions of BP would be gradually eroded and subsumed into the new entities policy decisions.

It is absolutely right that we have to understand exactly what the buybacks return for the benefit of the company. I think that essentially broadly logical forecasts are all that can really be achieved with any degree of accuracy, due to the vast number of interlinking economic vagaries and variables at play.

The issues for me are still the major, often impossible to calculate variables. Such as what if the share price rockets or what if it collapses. What if BP is the subject of massive movements in the FTSE outside of oil & gas economics, as with COVID dynamics say. What if the capital expended on buybacks was shifted in to working capital, with compounded but indecipherable/incalculable benefits for years to come.

What of the compounded benefits of no longer being obligated to pay any further dividend on the shares bought back, projected into the future. What are the tightening effects of the reducing number of shares on the capital structure they effectively change. If the share price is pushed higher will this change the perceived liquidity of the shares - will institutional investment grow at the expense of the numbers of PIs. Also, if buybacks do not work why are so many companies embracing them - there is a lot of grey matter backing their popularity. Why is the US taxing them at I believe1at a level of %, and still volumes grow almost exponentially.

I think a hugely complex mathematical model would have to be developed to even begin to exactify tor illustrate the benefits of buybacks & accuracy would be an ephemeral dream. The major investment banks and financial institutions have wrestled with this one for years - maybe AI will save the day at some point.

Without doubt if a company buys back shares and cancels them , less shares then own a bigger slice of the company, and the share price should go up. It is no stretch of the imagination to see fossil fuel based oil & gas as being industries in decline! Few will describe them as "Sunrise" rather than "Sunset" or "Smokestack" Industries. So that generally it is logical to see O & G companies as being in an incrementally declining market year on year, even if their profits indicate that they are doing well in those markets.

If this is the case - it is not just about checking out how much buybacks have increased the share price. It is also about how much buybacks have prevented the inevitable relative decline of the share price! Broadly speaking Shell has 12,500 service stations. How many customers will be using them to put fossil fuels in their vehicles in 2050 - i.e. 25-years time! Shell is divesting 500 or more each year to manage the decline in demand! It is sensible to take the same action with the company overall, counteracting the natural structural decline in the market value of the company by judicious use of buybacks to at least attempt to maintain the underlying value.

A complete about turn in strategy, taking 18-months to do this, no urgency, no zeal, contentedly observing a plummeting share price, completely oblivious to the screaming from institutional & pension fund shareholders, completely on another page from leading analysts, ensuring that activist investors like Elliot have a point, trashing the independence of a great British company, rewarding the Board that Looney proved were "Bonkers" stayed in place and were richly rewarded, absolutely no defence strategy or conviction, other than a litany of "it wasn't me" & "issues what issues, sound bytes! Does it have to be an American who shows us shows us how to run an oil company!!!

Auchinloss was seen as a safe pair of hands after Looney left. Hopefully, he will do some recycling & when he has inevitably fallen on his sword, pass it round for others to use!

Sky News reports on the reduction in renewables investment by BP and highlights the flexibility/variation that is built in to the strategy:

"In a further row back of climate targets the company has said renewable energy investment will fall by $5bn (£3.95bn) a year to just $1bn to $2bn (£790m to £1.58bn). Less than half that investment will go to low-carbon energy.

Funding for further oil and gas extraction will grow to $10bn (£7.9bn) annually as the business shifts focus back to its original mission of extracting fossil fuels. The majority (70%) of the funding will go to oil with the remaining 30% funding gas projects.!

Well the first stage of BP losing its independence is in place.

Auchinloss has and his team have defensively given it their best shot, but an £8m a year pay check is worth fighting for!. They have come up with a strategy design that would have gone some way to meet the demands of analysts, markets and financial institutions 18-months ago, but would still have been trailing in the wake of Sawan's Shell strategy. 18-months has been the gestation period for this "bold" new strategy.

The "new" strategy is not based on any process of original thought by Auchinloss, it has been forced on him by the markets, Elliot, a plummeting SP etc. He is seeing what he can get away with, coming up with his first iteration of what the markets want & it has sealed his fate! He may end up in a battle with Elliot or a predator, with both vying with each other to cut the staffing levels more, cut the renewables more, increase the spend on O & G etc. But he is about to join the Dodo!

In the not too distant future the "new" strategy will be seen as, too little, too late & not delivered with any genuine zeal or conviction. It may be seen as an improvement on Looney's strategy, which was of "the camel is a horse designed by a committee variety," before he went completely off piste & diversified the company strategy into knickers! He single-handedly changed BP from a cash-machine to a penny arcade slot machine. Predicting peak-oil, sucking up to government green fantasies, squandering cash-flow & completely misjudging the market.

BP - Bl-o-o-dy Pathetic, but it will now change, albeit relatively slowly!

Irish Times article - Extracted from FT & copyrighted by them:

https://www.irishtimes.com/business/2025/02/25/bp-to-abandon-pledge-to-cut-oil-and-gas-output-as-chief-fights-for-groups-survival/

Any long awaited (18-months) "grand strategy" from Murray Auchinloss will not owe a great deal to original thought on his part! The analysts, markets & economic environment has dictated the direction & general strategy statement content for Wednesday! Where will he obtain inspiration, zeal, and dynamism from!

Face the facts Auchinloss has as good as gone. There have been a lot of statements relating to wrapping up in renewables in a new entity & floating it off in a cloud of pixie dust, so that everyone lives upstream and happily ever after. Float what off!!! A mixed-bag bunch of generally loss-making scattergun acquired renewables that do not contribute to the bottom line! Then many indicate that they will be self-sufficient - NO THEY WILL NOT!

Is there any great demand for them in the market, many with a zero contribution to the bottom line, indeterminate timescale of acceptance of their product offering, hazy future, not having reached critical mass etc etc. So you put them all together and they are suddenly a commercially compelling offering! NO!

Blaqckrock has 9% of BP, Vanguard has 5%, Elliot has 5%, there will be other undeclared holdings below the 3% threshold, a predator can quickly build a 5-10% stake and with a few loosely held holdings BP has all but gone.

All ready to be asset-stripped! Lots of haphazard examples of sell-offs that are possible, say Castrol as an example, what a waste if they do, it is the biggest, most iconic oil brand in the UK! It should be marketed properly and built on, not sold in a fire sale.

BP has lost its independence. It would be easier to raise Lazarus from the dead than it would be to save BP now, even Houdini would be stuck for escape ideas & inspiration!

Lending,

Hope you are well and great to hear from you. Some interesting material has been coming to light. I'd seen the news indicating that all the insurance regulations were delaying the raising of the Bayesian to maybe April, but with May it will start to head for a year since it sank.

There are so many questions to answer, Stephen Chamberlain, co=defendant dying around the same time as Mike Lynch, Trump and Musk keen to put together the world's geniuses in various technology areas to lead the world rather than compete with it.

Do they see cyber-security as being a critical part of the western world's defences -the answer is yes. How do you entice a billionaire genius who has everything but serious recognition, to lead the program. There are a host of conspiracy theory type questions that need answers. If the Bayesian was righted on the seabed its mast would be sticking out of the surface, it is hardly on a par with raising the Titanic!

I did a monthly post to keep the thread going out of interest as there is more to come on this I believe.

You have done well on Nvidia - I put my Darktrace funds into BP at under £4 last October, so dividend in December, and now onboard for the merger, most probably with Shell. One or two of my US Techs are showing signs of life, actually up on Canadian Shopify!

Boyo,

How is the Welsh Wizard these days - I hope you are trading rather than "treading water!"

You look to have swapped Shell Oil for Virgin Olive oil! I can see where you are coming from as there seems to be an element of predictability in the share price movements. Has the shift been good for your blood pressure and very importantly your pocket!