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BP has announced the sale of a majority stake in its lubricants business to a US investment firm in a deal valued at US$10.1 billion (£7.5 billion), describing the move as a “milestone” in its plan to reduce costs.
New York-based Stonepeak has agreed to buy a 65% stake in Castrol.
Castrol provides lubricants for motorists as well as commercial vehicles and industrial sectors such as manufacturing.
It said BP is expected to receive net proceeds of approximately US$6 billion (£4.4 billion) from the sale.
Once the deal is completed, which is expected to happen by the end of 2026, BP will retain 35% ownership in the joint venture with Stonepeak.
BP said the sale was an “important milestone” in its plan to reform the business and reduce costs.
The oil giant is accelerating overhaul efforts by selling parts of the business to raise cash and run a more simplified group.
It is targeting $20bn (£14.8bn) of asset sales to help reduce its debt pile – about $11bn (£8.1bn) has already been announced or raised.
BP’s interim chief executive Carol Hawley said the agreed sale of Castrol was “a very good outcome for all stakeholders”.
“This sale marks an important milestone in the ongoing delivery of our reset strategy,” he said.
“We are reducing complexity, focusing on our leading integrated businesses downstream and accelerating the delivery of our plan.”
BP last week announced the appointment of Meg O’Neill as its new chief executive following the sudden departure of boss Murray Auchincloss.
Mr Auchincloss was in the top job for less than two years, overseeing the company’s decision to “reset” its strategy by scaling back renewable energy projects and renewing its focus on oil and gas.
Ms O’Neill would be the first woman to run BP and the first outsider to hold the position. Australian Oil and gas firm Woodside Energy since April 2021.