With an eye on slashing debt, BP sells majority stake in Castrol

With an eye on strengthening its balance sheet and advancing its ‘reset strategy’ that focuses on growing upstream and downstream oil and gas businesses, BP has struck a deal to sell a 65% stake in Castrol to global investment firm Stonepeak. The deal puts an enterprise value of US$10.1Bn on Castrol, resulting in total net proceeds of US$6.0Bn to BP.

Expected to close at the end of 2026, subject to regulatory approvals, the transaction forms a new 65/35 joint venture between Stonepeak and BP. Following a two-year ‘lock-up’ period, BP will have the option to sell its remaining 35% stake in Castrol, a major supplier of lubricants to the transportation sector, including marine. It provides a range of cylinder oils for slow- and medium-speed engines, system oils, gear oils, environmentally acceptable lubricants and technical services for ocean, offshore and coastal shipping.

BP interim CEO Carol Howle said with the transaction the company has “now completed or announced over half” of its targeted US$20Bn divestment programme, “with proceeds to significantly strengthen BP’s balance sheet.”

Ms Howle will hand over the reins of CEO to oil and gas veteran Meg O’Neill on 1 April 2026. Ms O’Neill is CEO of Woodside Energy, where she has held the top spot since 2021.

To date, BP has accumulated about US$11.0Bn from divestment transactions. It said all proceeds from its sale of the majority stake in Castrol would go towards reducing net debt target of US$14Bn -US$18 Bn by end of 2027.

It has been a remarkable year for BP, with 12 oil and gas discoveries, including Bumerangue in Brazil, its largest exploration discovery in 25 years.

Within Stonepeak’s energy portfolio is a 50% non-controlling interest in Coastal Virginia Offshore Wind, the 2.6-GW offshore windfarm off of Virginia Beach, Virginia.