BP has completed the sale of a majority stake in its lubricants arm Castrol, securing a $6 billion (£4.4 billion) windfall to help the energy giant reduce its debt burden further.
Deal details and proceeds
The oil giant agreed to sell a 65% shareholding in Castrol to New York-headquartered investment firm Stonepeak in December last year, retaining the remaining 35% stake within a newly formed joint venture.
BP confirmed it would use the net proceeds from the transaction to strengthen its balance sheet as it presses ahead with debt reduction efforts. Borrowings stood at $13.9 billion (£10.2 billion) at the close of September, according to its third-quarter update published last week.
Leadership and operations
Stonepeak has appointed Shell chief executive Ben van Beurden as chairman of Castrol's board following the agreement.
Castrol, which is based in the UK and employs more than 6,000 people globally, supplies lubricants to motorists, commercial vehicle operators and a range of industrial sectors including manufacturing.
BP chief executive Meg O'Neill said: "This deal brings meaningful cash proceeds to BP today while retaining a valuable stake in Castrol's future growth."
"Castrol's deep expertise and innovation span everything from advanced mobility solutions to data centre cooling. It will now have greater independence to accelerate its next phase of delivery."
Castrol chief executive Michelle Jou added: "Castrol begins the next part of its journey from a position of real strength, with trusted brands, strong customer relationships, talented colleagues and a clear strategy for growth."
Broader strategy and results
The disposal forms part of BP's broader effort to streamline its operations, reduce overheads and cut its debt pile. Ms O'Neill, who assumed the top role in April, is expected to set out her much-anticipated strategy for the group in December.
Third-quarter results released last week revealed substantial profits for BP, buoyed by surging crude prices driven by the conflict involving Iran. The energy giant reported a near-quadrupling in underlying replacement cost profits – its preferred measure of earnings – to $8.46 billion (£6.31 billion) in the three months to September 30, up from $2.21 billion (£1.65 billion) a year ago.
