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BP has struck a $6 billion deal to divest a controlling interest in its lubricants business Castrol to a US investment firm.
Details of the Transaction
The oil giant sold a 65 percent share in Castrol, which produces lubricants for automobiles, bikes, and commercial machinery, to the New York firm Stonepeak.
This transaction valued Castrol at $10.1bn, with BP obtaining $6bn in cash, which it will use to pay down debt and enable it to concentrate on its core business.
BP will hold onto a 35 percent share in Castrol, which it originally acquired in the year 2000.
Strategic Pivot and Divestment Plan
The UK-headquartered oil major said the sale is a "milestone" in its plans to restructure its business and strip out costs.
BP in February revealed intentions to divest $20 billion worth of holdings in a bid to prioritize its primary fossil fuel operations and fortify its balance sheet.
After this latest agreement and earlier disclosures, the company says it is over half way to achieving that goal.
It is also shifting its strategy away from funding for renewable power and renewing its focus on oil and gas after calls by some shareholders who were frustrated that its earnings and share price had lagged behind rivals.
Industry Context and Leadership Changes
Competitors such as Shell and Norway's Equinor have also scaled back plans to put money into green energy.
The Castrol sale comes a week after BP unveiled its inaugural woman CEO, Meg O'Neill, who will take the helm in April 2026.
Her unexpected selection came only three months after BP named a new board chair, Albert Manifold.
And she was handed the top job less than two years after Murray Auchincloss took over from Bernard Looney as chief executive.
Continuing Portfolio Simplification
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 Netherlands-based retail and fuel operations.
Acting CEO Carol Howle said the sale is a "very good outcome for all stakeholders".
"We are simplifying our structure, focusing the downstream on our core integrated operations, and speeding up the execution of our strategy," she stated.
