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BP has struck a $6bn deal to divest a majority stake in its lubricants business Castrol to a US investment firm.
The Specifics Behind the Major Deal
The energy major sold a 65 percent share in Castrol, which makes oils for cars, motorcycles and industrial vehicles, to the New York firm Stonepeak.
This deal valued Castrol at $10.1bn, with BP obtaining $6 billion cash, which it will allocate to reducing debt and enable it to focus on its primary operations.
BP will hold onto a 35 percent share in Castrol, which it first took control of in the year 2000.
Strategic Shift and Asset Sales
The London-based energy corporation said the sale represents a "key moment" in its plans to overhaul its business and strip out costs.
BP in February announced plans to divest $20bn worth of assets in a move to focus on its primary fossil fuel operations and fortify its financial position.
After today's deal and previous announcements, the company says it is more than halfway to achieving that goal.
It is also shifting its strategy from investment in green energy and refocusing on its focus on oil and gas following calls by some shareholders who were frustrated that its earnings and share price had lagged behind competitors.
Industry Trends and Executive Updates
Competitors like Shell and Norway's Equinor have also reduced plans to invest in green energy.
The Castrol sale arrives a week after BP unveiled its inaugural woman CEO, Meg O'Neill, who will assume leadership in April 2026.
Her surprise appointment 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.
Continuing Business Streamlining
This recent transaction is the most recent in a line of sales by the firm, which included offloading its American wind power assets and its Dutch mobility and convenience arm.
Acting CEO Carol Howle commented the sale is a "excellent result for all parties involved".
"We are reducing complexity, focusing the downstream on our core integrated operations, and speeding up the execution of our plan," she stated.
