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BP has struck a $6 billion deal to sell a majority stake in its lubricants business Castrol to a US investment firm.
The Specifics Behind the Major Deal
The oil giant sold a 65% stake in Castrol, which makes lubricants for cars, motorcycles and industrial vehicles, to the New York firm Stonepeak.
This transaction valued Castrol at $10.1 billion, with BP obtaining $6 billion cash, which it will use to pay down debts and enable it to concentrate on its primary operations.
BP will hold onto a 35 percent share in Castrol, which it first took control of in the year 2000.
A Strategic Shift and Divestment Plan
The London-based oil major said the sale represents a "milestone" in its plans to overhaul its business and reduce costs.
BP earlier this year revealed intentions to divest $20bn worth of holdings in a bid to focus on its core crude oil and gas business and strengthen its balance sheet.
Following today's deal and previous announcements, the company says it is over half way to achieving that target.
It is also changing its approach from investment in renewable power and refocusing on its emphasis on oil and gas after pressure from some shareholders who were disappointed that its profits and stock value had lagged behind competitors.
Sector Trends and Executive Updates
Rivals such as Shell and Norwegian company Equinor have also reduced plans to put money into renewables.
The Castrol sale comes a week after BP unveiled its first female chief executive, Meg O'Neill, who will assume leadership in April 2026.
Her unexpected selection came only three months after BP appointed a new board chair, Albert Manifold.
And she was given the CEO role less than two years after Murray Auchincloss took over from Bernard Looney as chief executive.
Ongoing Portfolio Streamlining
This latest deal is the latest in a series of divestments by the firm, which included offloading its US onshore wind energy business and its Dutch mobility and convenience arm.
Interim chief executive Carol Howle said the sale represents a "very good outcome for all stakeholders".
"We are simplifying our structure, concentrating our refining and marketing on our leading integrated businesses, and speeding up the execution of our strategy," she stated.
