BP Sells Major Stake in Castrol to Stonepeak in $6 Billion Deal

BP has agreed to sell a 65% stake in its Castrol lubricants business to U.S. investment firm Stonepeak for $6 billion, as part of its $20 billion divestment plan. The deal aims to reduce debt and streamline operations, marking a significant shift back to core oil and gas activities.

In a landmark move, BP has announced the sale of a 65% stake in its Castrol lubricants division to Stonepeak, a U.S. investment firm, for $6 billion. This transaction forms a cornerstone of BP's broader $20 billion divestment strategy aimed at reducing its debt and improving returns.

The agreement, disclosed on Wednesday, values Castrol at $10.1 billion. Under the terms, BP will retain a 35% stake in a new joint venture with Stonepeak, with an option to divest its share after a two-year lock-in period. The sale, including $800 million for accelerated dividend payments, is part of BP's plan to refocus on its core oil and gas business.

Analysts note that while this divestment boosts short-term dividend payouts, it may challenge BP's long-term earnings quality. The sale comes amid strategic shifts within BP, including leadership changes and a renewed focus on streamlining and optimizing its portfolio.

(With inputs from agencies.)