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Castrol centre-piece of $20 bln divestment programme

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Q3 profit of $2.21 billion vs forecast $2.02 billion

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CEO expects asset sales to reach around $5 billion for

2025

(Adds graphic, analyst comment, details on downstream results,

background on BP strategy)

By Shadia Nasralla and Stephanie Kelly

LONDON, Nov 4 (Reuters) - Oil major BP reported a

smaller than expected fall in third-quarter underlying profit on

Tuesday as higher refining margins partly offset the impact of

lower crude prices.

However, BP provided no update on the closely-watched sale

process for its Castrol lubricants unit, the centre-piece of its

$20 billion asset-sale drive to slash its debt pile.

After an ill-fated foray into renewables under previous CEO

Bernard Looney, BP has vowed to increase profitability and cut

costs while re-routing spending to focus on oil and gas.

BP in August launched a review of how best to develop and

monetise its oil and gas production assets and when new Chair

Albert Manifold took up his post last month he called for a

deeper reshaping of BP's portfolio to increase profitability.

Reuters reported in May, citing sources, that BP had kicked

off the sale of Castrol.

PACE OF BUYBACKS KEPT STEADY

The company said it made an underlying replacement cost

profit, or adjusted net income, of $2.21 billion, compared with

analysts' average estimate of $2.02 billion in a

company-provided poll, and $2.27 billion a year ago.

RBC analyst Biraj Borkhataria attributed the profit beat to

BP's gas and downstream businesses.

BP shares were up 0.8% at 0824 GMT, outperforming a broader

index of European energy companies, which was down 1%.

BP kept the pace of its quarterly share buyback programme at

$750 million through the third quarter.

Chief Executive Murray Auchincloss said he expected

completed or announced asset sale agreements would reach around

$5 billion this year, helped by selling minority stakes in its

U.S. onshore pipelines announced on Monday.

BP's European rivals Shell and TotalEnergies

also posted third-quarter profit falls dragged down by

lower oil prices, though Shell beat expectations helped by

better trading results in its huge gas division and Total

benefited from higher refining margins.

U.S. majors Exxon and Chevron ( CVX ) both beat

third-quarter estimates on higher oil and gas production.

Average Brent crude prices during the quarter

declined 13% from the same period last year.

HIGHER REFINING RESULTS

BP's customers and products division, boosted by higher

refining margins, posted a profit of $1.7 billion, outperforming

last year's $381 million, when BP had a big outage at its U.S.

Whiting refinery.

The customers division delivered its strongest third-quarter

results on record, BP said, adding its refining availability was

close to 97%, the best quarter in 20 years for the current

portfolio.

BP's operating cash flow in the quarter was $7.8 billion,

above last year's $6.8 billion. As previously guided, net debt

was steady at around $26 billion compared with the previous

quarter.

BP aims to cut its net debt to between $14 billion and $18

billion by end-2027.