Archie Mitchellbusiness reporter
BP has struck a $6bn (£4.4bn) deal to sell a majority stake in its motor oil division Castrol to a US investment firm.
The oil giant sold a 65% stake in Castrol, which makes lubricants for cars, motorcycles and industrial vehicles, to New York-based Stonepeak.
The deal valued Castrol at $10.1 billion (£7.5 billion), with BP receiving $6 billion in cash, which it will use to pay down debt and focus on its core business.
BP will own a 35% stake in Castrol, which it first took control of in 2000.
The London-based oil major said the sale was a “milestone” in plans to reform its business and reduce costs.
In February BP announced plans to sell $20bn (£15bn) worth of assets to focus on its core crude oil and gas business and strengthen its balance sheet.
After today’s deal and previous announcements, the company says it is halfway to meeting that goal.
This too Is shifting its strategy away from investing in green energy And it refocused its attention on oil and gas after pressure from some investors who were disappointed that its profits and share price had lagged rivals.
Rivals Shell and Norwegian company Equinor have also reduced plans to invest in green energy and US President Donald Trump’s call to “drill baby drill” has encouraged companies to invest in fossil fuels.
Castrol sale comes after a week BP unveils its first female chief executiveMeg O’Neill, who will take command in April 2026.
His surprise appointment came just three months after BP appointed a new chairman, Albert Manifold.
And he was handed the top job less than two years after Murray Auchincloss replaced Bernard Looney as chief executive.
Wednesday’s deal is the latest in a series of sales by the company, which includes selling its US onshore wind energy business and its Dutch mobility and convenience arm.
Interim chief executive Carol Hawley said the sale was a “very good outcome for all stakeholders”.
“We are reducing complexity, focusing on our leading integrated businesses downstream and accelerating the delivery of our plan,” he said.
Russ Mould, investment director at AJ Bell, said the deal was “an early Christmas present” for BP shareholders.
“The significant proceeds from the transaction will allow BP to significantly service its heavy debt. It also means it is on track to achieve its target of $20 billion of divestments by 2027,” he said.
BP shares opened higher on Wednesday morning following the news, before losing most of their gains.