BP has completed the sale of a majority stake in its lubricants business Castrol, securing a $6 billion (£4.4 billion) boost to further reduce its debts.
The oil major agreed the sale of a 65% holding in Castrol to US investment firm Stonepeak in December last year. BP will retain the remaining 35% stake in a new joint venture.
Proceeds to strengthen balance sheet
BP said it would use the net proceeds from the deal to bolster its balance sheet as it continues to pay down debts, which stood at $13.9 billion (£10.2 billion) at the end of September, according to its third quarter update last week.
New York-based Stonepeak has named Shell chief executive Ben van Beurden as chairman of Castrol's board following the deal.
Castrol's global operations
Castrol is headquartered in the UK and employs more than 6,000 staff worldwide. It provides lubricants for motorists as well as for commercial vehicles and industrial sectors, such as manufacturing.
Meg O'Neill, chief executive of BP, 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."
Part of wider divestment plan
BP has been selling off parts of the business and assets as part of a plan to simplify the group, strip out costs and pay down debts.
Ms O'Neill, who took on the top job in April, is set to outline her long-awaited strategy for the group in December.
Third quarter results last week showed bumper profits for BP amid soaring crude prices caused by the Iran war. It 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.
