BP has struck a $6bn (£4.4bn) deal to sell a majority stake in its motor oil division Castrol to a US investment firm.
The oil giant sold a 65% stake in Castrol, which makes lubricants for cars, motorcycles and industrial vehicles, to New York-based Stonepeak.
The deal valued Castrol at $10.1bn (£7.5bn), with BP receiving $6bn in cash, which it will use to pay down debts and allow it to focus on its core business.
BP will hold onto a 35% stake in Castrol, which it first took control of in 2000.
The London-based oil major said the sale is a “milestone” in its plans to overhaul its business and strip out costs.
BP in February announced plans to sell off $20bn (£15bn) worth of assets 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 its over half way to meeting that target.
It is also shifting its strategy away from investment in green energy and renewing its focus on oil and gas following pressure from some investors who were frustrated that its profits and share price had lagged behind rivals.
Rivals Shell and Norwegian company Equinor have also scaled back plans to invest in green energy and US President Donald Trump’s call to “drill baby drill” has encouraged firms to invest in fossil fuels.
The Castrol sale comes a week after BP unveiled its first female chief executive, Meg O’Neill, who will take the helm in April 2026.
Her surprise appointment came only three months after BP appointed a new chairman, Albert Manifold.
And she was handed the top job less than two years after Murray Auchincloss took over from Bernard Looney as chief executive.
Wednesday’s deal is the latest in a series of sales 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 is a “very good outcome for all stakeholders”.
“We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan,” she added.
Russ Mould, investment director at AJ Bell, said the deal was “an early Christmas present” for BP shareholders.
“The significant proceeds from the transaction will allow BP to make a decent dent in its onerous borrowings pile. It also means it is well on the way to achieving its goal of $20 billion worth of divestments by 2027,” he said.
Shares in BP opened higher on Wednesday morning on the news, before giving up most of their gains.
By BBC News
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