bp to sell majority interest in Castrol to Stonepeak
Key Highlights
- bp will divest a 65% stake in Castrol to Stonepeak for an enterprise value of $10.1 billion.
- The lubribants-business deal is expected to generate around $6 billion in net proceeds, aiding bp's debt reduction goals.
- bp aims to reduce net debt by $14-18 billion by 2027.
bp plc has agreed to sell a 65% shareholding in Castrol to Stonepeak at an enterprise value of $10.1 billion. The lubricants-business deal with the investments firm marks the halfway point in bp’s plan to divest $20 billion in assets to shore up the balance sheet as part of its reset strategy.
Castrol manufactures and markets engine oils, industrial fluids, and greases through blending plants and third-party infrastructure and warehouses worldwide across 150 countries.
In a release Dec. 24, bp said the deal is expected to result in total net proceeds to bp of about $6.0 billion, which includes around $0.8 billion for the pre-payment of future dividend income over the short to medium term on bp’s retained 35% stake and other adjustments. After a 2-year lock-up period, bp has the option to sell its 35% stake.
The implied total equity value of Castrol is $8.0 billion after deducting JV minority interests totaling $1.8 billion, and other debt-like obligations of around $0.3 billion, and subject to customary adjustments. A significant proportion of Castrol JV minority interests relate to the shareholding in the publicly listed Castrol India Ltd., bp said.
Stonepeak, in a separate release, said Canada Pension Plan Investment Board (CPP Investments) will invest up to $1.05 billion in support of the transaction, resulting in an indirect stake in Castrol.
Divestment proceeds
Carol Howle, bp’s interim chief executive officer, said the deal allows the company to “realize value for [bp] shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum.”
With the announcement, she continued, the company has "completed or announced over half of our targeted $20 billion divestment program."
Howle was recently named interim chief following the resignation of Murray Auchincloss ahead of Meg O’Neill’s start as bp’s next chief executive in April 2026.
The deal—expected to close by end-2026, subject to regulatory approvals—brings bp’s completed and announced divestment proceeds to around $11 billion. The company is targeting net debt reduction of $14-18 billion by end-2027.
As of the end of third-quarter 2025, bp’s net debt was $26.1 billion. Divestment proceeds guidance for 2025 is over $4 billion, of which $1.7 billion has been received as of the third quarter, with the remainder expected to be received by year-end 2025.