BP has agreed to sell a US investment firm the bulk of its motor oil division Castrol for $6 billion (£4.4 billion). The oil giant sold New York-based Stonepeak a 65% share in Castrol, a company that produces lubricants for automobiles, motorbikes, and industrial vehicles.
Castrol was valued at $10.1 billion (£7.5 billion) in the purchase, while BP received $6 billion in cash, which it will use to settle debt and concentrate on its primary business. BP will continue to own 35% of Castrol, which it initially acquired in 2000.
The sale, according to the London-based oil giant, represents a “milestone” in its efforts to restructure its operations and reduce costs. In an effort to strengthen its balance sheet and focus on its core crude oil and gas business, BP announced in February plans to sell $20 billion (£15 billion) in assets.
The corporation claims it is more than halfway to achieving that goal, based on today’s agreement and other statements. In response to pressure from certain investors who were dissatisfied that its profits and share price had fallen behind competitors, it is also changing its strategy away from investing in green energy and refocusing on oil and gas.
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