BP has finalized the sale of a 65% shareholding in its lubricants business, Castrol, to Stonepeak for $6 billion. This deal values the Castrol unit at approximately $10.1 billion. The agreement follows BP's efforts to find a buyer for Castrol, which were reported earlier this year.
This transaction is part of BP's broader strategy to divest $20 billion worth of assets by the end of 2027. The company aims to refocus on its core operations in oil and gas exploration and development. Interim CEO Carol Howle remarked that the sale represents a significant milestone in delivering BP's reset strategy, helping to reduce complexity and streamline operations.
Following the sale, BP will have a lock-up period of two years before it can decide whether to sell its remaining 35% stake in Castrol. This flexibility could provide BP with additional capital as it continues to navigate its strategic priorities.
The announcement of the Castrol sale comes shortly after BP appointed Meg O'Neill as its new CEO, set to take over on April 1, 2025. This will be the fourth CEO BP has appointed in just six years. Market analysts have noted that BP's performance has lagged behind its peers, with declining profits reported in both 2023 and 2024. However, BP’s shares opened 1.3% higher on the day of the announcement and later closed at a 0.9% gain. The company's share price is up around 9% for the year, recovering from a 15.7% decline in 2024, partly due to recent leadership changes and operational improvements.
As BP moves forward with its asset divestment plan, industry experts suggest that further stake sales in different parts of the company could be on the horizon. This shift is expected to help BP concentrate on its primary focus of oil and gas exploration and development.