🔗 Share this article

Image Source

The company has finalized a $6 billion deal to divest a majority stake in its lubricants business Castrol to a US investment firm.

Details of the Major Deal

The oil giant has sold a 65% stake in Castrol, which produces lubricants for automobiles, bikes, and commercial machinery, to New York-based Stonepeak.

This transaction valued Castrol at $10.1 billion, with BP receiving $6 billion cash, which it will use to pay down debts and allow it to focus on its primary operations.

BP will hold onto a 35% stake in Castrol, which it first took control of in the year 2000.

Strategic Shift and Divestment Plan

The UK-headquartered oil major said the sale is a "milestone" in its plans to restructure its business and reduce expenses.

BP earlier this year announced plans to divest $20 billion worth of holdings in a move to focus on its primary fossil fuel operations and strengthen its balance sheet.

Following today's deal and earlier disclosures, the company says it is more than halfway to achieving that goal.

It is also shifting its strategy away from funding for renewable power and refocusing on its focus on fossil fuels following pressure from some shareholders who were disappointed that its earnings and stock value had trailed competitors.

Industry Trends and Leadership Changes

Competitors such as Shell and Norwegian company Equinor have also reduced plans to put money into renewables.

The Castrol sale comes a week after BP announced its inaugural woman CEO, Meg O'Neill, who will assume leadership in April 2026.

Her unexpected selection came only three months after BP appointed a new chairman, Albert Manifold.

And she was given the CEO role less than two years after Murray Auchincloss took over from Bernard Looney as CEO.

Ongoing Portfolio Simplification

This recent transaction is the most recent in a line of sales by the firm, which have included selling its American wind power assets and its Dutch mobility and convenience arm.

Acting CEO Carol Howle said the sale is a "excellent result for all parties involved".

"We are reducing complexity, concentrating our refining and marketing on our leading integrated businesses, and accelerating delivery of our strategy," she stated.