BP to sell majority stake in $10bn Castrol business to US investment firm | BP
BP has agreed to sell a majority stake in its $10bn (£7.4bn) lubricants business Castrol to US investment firm Stonepeak as new chairman Albert Manifold rapidly reshapes the under-pressure oil and gas company.
Stonepeak will acquire a 65% stake in Castrol in a deal that values the division at $10.1 billion, including debt. The deal, in which BP will retain a 35% stake in the company through a joint venture, is expected to be completed by the end of next year, the company said on Wednesday.
It marks the latest step in BP’s effort to sell $20 billion in assets as it faces pressure from activist US hedge fund Elliott Investment Management to cut costs and reduce debt.
BP said it would use $6 billion in proceeds from the deal to pay off its own debt, which stood at $26.1 billion at the end of the last quarter.
Carol Howle, BP’s interim chief executive, said: “With this, we have completed or announced more than half of our targeted $20 billion divestment programme, with proceeds that will significantly strengthen BP’s balance sheet.
“The sale marks a significant milestone in the ongoing rollout of our reset strategy. We are reducing complexity, focusing on our leading integrated businesses downstream and accelerating the execution of our plan.”
BP’s new chairman is overseeing a radical overhaul of its strategy following a failed attempt to move into renewable energy under his predecessor.
Last week, the company made the surprise announcement that it would replace CEO Murray Auchincloss after less than two years in the top role. He will be replaced by Woodside Energy’s chief executive Meg O’Neill in April, with Howle taking over in the meantime.
In October, Manifold, the former chief executive of construction materials company CRH, became chairman of the FTSE 100 group. He said last week that O’Neill would help BP become “a simpler, leaner and more profitable company”.
Maurizio Carulli, an analyst at investment firm Quilter Cheviot, called the Castrol deal “a positive step forward for BP, reinforcing its ongoing strategy reset and aim to reduce its net debt and refocus on its downstream businesses.”
BP began the sale process for Castrol in February, when Auchincloss announced a strategic reset by focusing more on oil and gas and pledging to cut costs and reduce debt.
The Castrol business includes lubricants for the automotive and industrial sectors and develops liquid coolants for data centres.
BP’s continued stake in the business leaves Castrol open to a “growth plan”. The company has the option to sell its shares after a two-year lock-up period.
Shares rose 0.3% in early trading Wednesday and are up about 6% year-to-date.
Petrofac, one of the North Sea’s largest oil and gas contractors, has agreed to sell its asset solutions business to US industrial designer and manufacturer CB&I.
The companies did not disclose the financial details of the deal in their announcement on Wednesday, but it will be welcome news for Petrofac, which filed for administration in October. The company, which employs about 7,300 people, said 3,000 people are expected to join CB&I when the deal is completed, which should be in the first quarter of 2026.
