BP sells stake in motor oil arm Castrol in $6bn deal

Archie MitchellBusiness reporterGetty ImagesBP has struck a $6bn (£4.4bn) deal to promote a majority stake in its motor oil division Castrol to a US funding agency.The oil big bought a 65% stake in Castrol, which makes lubricants for automobiles, bikes and industrial automobiles, to New York-based Stonepeak.The deal valued Castrol at $10.1bn (£7.5bn), with BP receiving $6bn in money, which it can use to pay down money owed and permit it to give attention to its core enterprise.BP will maintain onto a 35% stake in Castrol, which it first took management of in 2000.The London-based oil main stated the sale is a “milestone” in its plans to overtake its enterprise and strip out prices.BP in February introduced plans to unload $20bn (£15bn) value of belongings in a bid to give attention to its core crude oil and gasoline enterprise and strengthen its steadiness sheet.Following as we speak’s deal and former bulletins, the corporate says its over half option to assembly that focus on.It is usually shifting its technique away from funding in inexperienced power and renewing its give attention to oil and gasoline following strain from some traders who have been pissed off that its earnings and share worth had lagged behind rivals.Rivals Shell and Norwegian firm Equinor have additionally scaled again plans to spend money on inexperienced power and US President Donald Trump’s name to “drill child drill” has inspired corporations to spend money on fossil fuels.The Castrol sale comes per week after BP unveiled its first feminine chief govt, Meg O’Neill, who will take the helm in April 2026.Her shock appointment got here solely three months after BP appointed a brand new chairman, Albert Manifold.And he or she was handed the highest job lower than two years after Murray Auchincloss took over from Bernard Looney as chief govt.Wednesday’s deal is the most recent in a sequence of gross sales by the agency, which included offloading its US onshore wind power enterprise and its Dutch mobility and comfort arm.Interim chief govt Carol Howle stated the sale is a “excellent end result for all stakeholders”.”We’re lowering complexity, focusing the downstream on our main built-in companies, and accelerating supply of our plan,” she added.Russ Mould, funding director at AJ Bell, stated the deal was “an early Christmas current” for BP shareholders.”The numerous proceeds from the transaction will permit BP to make a good dent in its onerous borrowings pile. It additionally means it’s effectively on the way in which to attaining its objective of $20 billion value of divestments by 2027,” he stated.Shares in BP opened larger on Wednesday morning on the information, earlier than giving up most of their beneficial properties.