LONDON, Nov 2 (Bernama-PA Media/dpa) -- BP has completed the sale of a majority stake in lubricants business Castrol in a move that gives it a US$6-billion boost to pay debts down further, PA Media/dpa reported.
The oil major agreed to the sale of a 65 per cent stake in Castrol to US investment firm Stonepeak in December last year and will retain the remaining 35 per cent stake in a new joint venture.
BP said it would use the net proceeds from the deal to bolster its balance sheet as it continues to pay down debts, which stood at US$13.9 billion at the end of September, according to its third quarter update last week.
New York-based Stonepeak named Shell chief executive Ben van Beurden as chairman of Castrol’s board following the deal.
Castrol is headquartered in the United Kingdom and employs more than 6,000 staff worldwide.
It provides lubricants for motorists as well as for commercial vehicles and industrial sectors, such as manufacturing.
Meg O’Neill, chief executive of BP, said: “This deal brings meaningful cash proceeds to BP today while retaining a valuable stake in Castrol’s future growth.
“Castrol’s deep expertise and innovation span everything from advanced mobility solutions to data centre cooling.
“It will now have greater independence to accelerate its next phase of delivery.”
Castrol chief executive Michelle Jou added: “Castrol begins the next part of its journey from a position of real strength, with trusted brands, strong customer relationships, talented colleagues and a clear strategy for growth.”
BP has been selling off parts of the business and assets as part of a plan to simplify the group, strip out costs and pay down debts.
O’Neill, who took on the top job in April, is set to outline her long-awaited strategy for the group in December.
Third quarter results last week showed bumper profits for BP amid soaring crude prices caused by the Iran war.
It reported a near-quadrupling in underlying replacement cost profit – its preferred measure of earnings – to US$8.46 billion in the three months to Sept 30, up from US$2.21 billion a year earlier.
-- BERNAMA-PA MEDIA/dpa
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