BP PLC (LSE:BP.) has agreed to sell a 65% stake in its Castrol lubricants business to the investment firm Stonepeak, valuing the business at about $10 billion and marking one of the biggest steps yet in the oil major’s plan to slim down and shore up its finances.
The transaction will generate around $6 billion of net proceeds for BP, including advance payments of future dividends, with all the cash earmarked for reducing debt. At the end of the third quarter, BP’s net debt stood at $26.1 billion, well above its target range of $14 billion to $18 billion by the end of 2027.
Castrol, which makes engine oils and lubricants for cars, industry and heavy machinery, will be placed into a new joint venture owned 65% by Stonepeak and 35% by bp. The deal values Castrol at about 8.6 times its most recent annual earnings, a multiple that bp said reflects the brand’s resilience and growth prospects.
While bp is giving up control, it is keeping a significant minority stake. That allows it to benefit if Castrol continues to grow, while also preserving the option to sell its remaining holding after a two-year lock-up period. Castrol has reported nine consecutive quarters of year-on-year earnings growth.
Carol Howle, BP’s interim chief executive, said the sale was “a very good outcome for all stakeholders”, adding that it helped simplify the group and strengthened the balance sheet. She said bp had now completed or announced more than half of its $20 billion divestment programme.
For Stonepeak, the deal is a bet on steady demand for lubricants, which are used across transport, manufacturing and energy systems worldwide. The firm said Castrol’s long history and global footprint made it an attractive investment.
The transaction is expected to complete by the end of 2026, subject to regulatory approvals.