BP has agreed to sell a 65% stake in its motor oil division, Castrol, to Stonepeak, a US investment firm, for $6 billion. The deal values Castrol, known for its lubricants used in cars, motorcycles, and industrial vehicles, at $10.1 billion. BP will receive the payment in cash, which the company intends to use to reduce its debt and refocus on its core business operations.

The $6 billion cash injection will significantly contribute to BP's ongoing efforts to strengthen its balance sheet. The sale is a substantial step towards BP's previously announced target of divesting $20 billion in assets. With this deal, the company has now achieved over half of its planned asset sales. BP will retain a 35% stake in Castrol, maintaining a degree of involvement in the business it initially acquired in 2000.

This transaction occurs within a broader context of strategic shifts in the energy sector. BP's move signals a renewed emphasis on its traditional oil and gas business, a change partly driven by investor pressure to improve profitability and share performance, which had been lagging behind competitors like Shell and Norw. The sale allows BP to streamline its operations and allocate capital to its core areas of expertise.

BP's decision to divest a majority stake in Castrol marks a significant milestone in its business overhaul. The company aims to reduce costs and simplify its structure. While initially pursuing investments in green energy, BP is now recalibrating its strategy to prioritize oil and gas, reflecting the ongoing demand and profitability in these sectors.

Looking ahead, the deal is expected to close, pending regulatory approvals. BP will likely continue to optimize its portfolio, focusing on high-return projects within the oil and gas domain. Stonepeak, on the other hand, will gain control of a well-established lubricants business with a global presence, positioning itself to capitalize on the continued demand for motor oils and industrial lubricants.