The TANAP Pipeline and Its Strategic Importance
BP TANAP holds BP’s 12% interest in the Trans-Anatolian Natural Gas Pipeline (TANAP), a critical component of the Southern Gas Corridor pipeline system. The TANAP pipeline transports natural gas from the Shah Deniz field in Azerbaijan’s section of the Caspian Sea through Turkey to markets in Europe, including Italy and Greece.
The deal, which is expected to close in the second quarter of 2025, is subject to regulatory and TANAP shareholder approvals. Proceeds from the transaction will contribute to BP’s broader $20 billion divestment program, announced as part of its strategic reset.
BP’s Turnaround Plan Under CEO Murray Auchincloss
BP has faced mounting pressure from investors, including activist firm Elliott Investment Management, to reverse its declining market value. Under CEO Murray Auchincloss, who took the helm in 2023, the company has shifted its strategy to refocus on fossil fuels after previously attempting to transition away from hydrocarbons.
In February 2025, Auchincloss unveiled a plan to divest $20 billion worth of assets by the end of 2027 to improve cash flows and strengthen the company’s financial position. The sale of the BP TANAP stake is the first major step in this direction.
“This unlocks capital from our global portfolio while retaining our role in this strategic asset for bringing Azerbaijan gas to Europe,” said William Lin, BP’s Executive Vice President, in a statement.
Potential Sale of Castrol Lubricants Business
BP is also reviewing the potential sale of its Castrol lubricants business, which could significantly advance its divestment goals. According to Bloomberg, Castrol could be worth as much as $10 billion, and Saudi Aramco is reportedly considering a potential offer.
Investor Response to BP’s Revival Plan
BP’s strategic reset has received a lukewarm response from investors, with shares falling on the day of the announcement. Auchincloss has acknowledged that the plan is a step in the right direction but emphasized that execution will be key to achieving the desired turnaround.
However, the plan has fallen short of expectations for some investors, including Elliott Investment Management. According to Bloomberg, Elliott views BP’s strategy as lacking urgency and ambition, signaling that more aggressive measures may be needed to restore investor confidence.
The sale of the BP TANAP stake to Apollo funds represents a significant milestone in BP’s divestment program. As the company continues to streamline its portfolio and refocus on its core operations, the success of its turnaround plan will depend on its ability to execute effectively and deliver tangible results for shareholders.