BP's $6bn Castrol Deal: A Game-Changer for Oil's Giant

In a strategic move, BP has sold a 65% stake in its motor oil division Castrol for a staggering $6 billion (£4.4 billion) to Stonepeak, a US-based investment firm. This transaction values Castrol at $10.1 billion (£7.5 billion) and is crucial for BP as it seeks to pay down debt and refocus on its core oil and gas operations. Retaining a 35% stake in Castrol, BP views this sale as a milestone in its ongoing transformation toward shedding costs and streamlining its business model.

The decision is part of BP’s broader plan to divest $20 billion (£15 billion) of assets by 2027, aimed at strengthening its balance sheet. This shift comes as BP faces pressure from investors to uplift its performance, especially as competitors like Shell and Equinor scale back their green energy investments. BP’s evolving strategy indicates a renewed commitment to fossil fuels, aligning with industry trends influenced by calls for increased drilling and production.

This sale occurs shortly after BP appointed Meg O’Neill as its first female chief executive, who is set to take over in April 2026. The timing of these changes reflects a broader effort within BP to adapt to market dynamics and stakeholder expectations. Investment experts are praising the Castrol sale as a beneficial outcome for shareholders, boosting BP’s commitment to reducing its debt burden significantly.

Overall, this transaction marks yet another key moment for BP in its efforts to reshape its portfolio and regain competitive momentum in the oil and gas sector.