BP's $6 Billion Castrol Sale: A Game Changer in Asset Strategy

BP has agreed to sell a 65% stake in its Castrol lubricants business to Stonepeak for $6 billion, advancing its $20 billion divestment plan. The deal aims to cut debt and streamline operations while refocusing on core oil and gas activities. BP retains a 35% stake in Castrol.

BP is making significant strides in its divestment strategy by agreeing to sell a 65% stake in its Castrol lubricants business to U.S. investment firm Stonepeak for approximately $6 billion. This move is part of the British oil giant's $20 billion plan to cut debt and enhance shareholder returns.

The deal values the century-old Castrol unit at $10.1 billion, marking BP's most notable asset sale yet in its redefined business strategy. Following the sale, BP will maintain a 35% stake in a new joint venture with Stonepeak, which it can opt to sell after a two-year lock-in period.

Proceeds from the sale will aid BP in reducing its net debt from $26 billion to a target range of $14 billion to $18 billion by 2027, aligning with its focus on core oil and gas operations. The move comes as part of BP's efforts to enhance profitability and shareholder returns, under the stewardship of newly appointed CEO Meg O'Neill.

(With inputs from agencies.)