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The company has finalized a $6 billion agreement to divest a majority stake in its lubricants business Castrol to a US investment firm.
The Specifics Behind the Major Deal
The oil giant has sold a 65 percent share in Castrol, which produces oils for automobiles, bikes, and commercial machinery, to New York-based Stonepeak.
This transaction valued Castrol at $10.1bn, with BP receiving $6bn in cash, which it will use to pay down debt and enable it to concentrate on its primary operations.
BP will hold onto a 35% stake in Castrol, which it originally acquired in the year 2000.
A Strategic Shift and Divestment Plan
The London-based 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 sell off $20bn worth of holdings in a move to prioritize its primary fossil fuel operations and strengthen its financial position.
After today's deal and previous announcements, the company states it is more than halfway to meeting that goal.
It is also changing its approach away from funding for green energy and refocusing on its emphasis on oil and gas after pressure from some shareholders who were frustrated that its earnings and share price had lagged behind competitors.
Sector Context and Leadership Changes
Rivals like Shell and Norwegian company Equinor have also reduced plans to invest in green energy.
The Castrol sale arrives 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 board chair, Albert Manifold.
And she was handed the top job less than two years after Murray Auchincloss took over from Bernard Looney as CEO.
Ongoing Business Streamlining
This recent transaction is the latest in a series of divestments by the company, which have 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 simplifying our structure, focusing the downstream on our leading integrated businesses, and speeding up the execution of our strategy," she stated.
