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British energy group BP announced Wednesday that it has agreed to sell a 65% stake in its Castrol lubricants business to U.S.-based investment firm Stonepeak as part of its divestment plan to ease its debt burden.
The sale is expected to bring BP around $6 billion in proceeds and values Castrol at $10.1 billion, making it one of the company’s largest divestments, according to a statement.
Under the agreement, Castrol will be transferred into a new joint venture in which BP will retain a minority stake. The company expects the transaction to close by the end of 2026, pending regulatory approvals.
The transaction forms part of BP’s plan to divest $20 billion in assets by the end of 2027 as it works to lower net debt and reallocate capital toward higher-return oil and gas projects. With this sale, total completed and announced divestments will reach roughly $11 billion, the company stated.
All proceeds are earmarked for debt reduction, with net debt standing at $26.1 billion at the end of the third quarter of 2025. BP aims to bring that figure down to between $14 billion and $18 billion by the end of 2027.
Interim chief executive Carol Howle said the agreement marks progress in BP’s restructuring plan. "The sale marks an important milestone in the ongoing delivery of our reset strategy," she said, adding that the proceeds will help strengthen BP’s balance sheet.
BP has been seeking to improve its financial performance and streamline its operations after several years of weaker returns. The company has been redirecting capital from some renewable energy ventures back into traditional oil and gas projects, which deliver higher and more stable returns.
Last week, BP appointed Meg O’Neill, the chief executive of Australia’s Woodside Energy, to replace Murray Auchincloss as chief executive from April.
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