BP Negotiates Sale of Castrol Lubricants Unit to Stonepeak

LONDON, Nov 12 (Reuters) – BP is in active negotiations with investment firm Stonepeak about selling its Castrol lubricants unit. This sale is part of BP’s strategy to reach a $20 billion divestment goal, according to two sources familiar with the situation. The discussions come after BP began the sale process earlier this year, placing its century-old lubricants business under review as it shifts its focus away from renewable energy.

In September, both Stonepeak and private equity firm One Rock submitted bids for the Castrol unit, the sources said, requesting anonymity due to the private nature of the matter. They noted that no deal may materialize yet, and it is unclear if BP continues to engage with One Rock or other potential bidders. Market analysts from RBC estimate the value of the Castrol sale to be around $8 billion.

Representatives for BP, Stonepeak, and One Rock have all declined to comment on the negotiations. Following the Reuters report, BP’s US listed depository receipts experienced a 2% increase but later reduced those gains.

Under the leadership of new Chair Albert Manifold, BP has emphasized cost-cutting and a strategic pivot towards oil and gas. In August, the company initiated a comprehensive review of its oil and gas production assets. Earlier this month, CEO Murray Auchincloss mentioned strong interest in Castrol but did not provide specific details. He anticipates that asset sales could total about $5 billion this year, including stakes in U.S. onshore pipelines.

The sale of Castrol represents a crucial effort by BP to streamline its operations and enhance profitability amid increasing pressure from investors, including the activist hedge fund Elliott. Additionally, BP reported a smaller-than-expected decline in its third-quarter underlying profit, supported by robust performance across its divisions despite lower crude prices.

New York-based Stonepeak, which manages around $80 billion in assets, is known for investing in energy, digital infrastructure, and logistics. In May, it announced its acquisition of a 65% stake in Phillips 66‘s retail fuel business in Germany and Austria.