Britain’s BP has agreed to sell a 65 per cent shareholding in Castrol to Stonepeak for US$6 billion as part of the oil major’s strategy to simplify its portfolio.
The sale values Castrol at US$10.1 billion, reflecting the strength of the business and future growth potential.
“With this, we have now completed or announced over half of our targeted $20bn divestment programme, with proceeds to significantly strengthen bp’s balance sheet,” according to BP interim CEO Carol Howle.
“The sale marks an important milestone in the ongoing delivery of our reset strategy. We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan.”
Upon completion of the transaction, BP will incorporate a new joint venture that will be 65 per cent owned by Stonepeak and 35 per cent by BP.
Following a two-year lock-up period, BP can sell the 35 per cent stake to Castrol. The transaction is expected to complete by the end of 2026, subject to regulatory approvals.
The sale is part of BP’s US$20 billion divestment program, of which the company has already completed or announced US$11 billion of divestment proceeds.
All proceeds from this program will be used to reduce the company’s net debt to its target of US$14 billion to US$18 billion by the end of 2027.
BP expects divestment proceeds for 2025 over US$4 billion. The company will continue to seek opportunities to reduce its portfolio and optimise its cost base. It will invest with discipline with a focus on maximising cash flow and returns.
Anthony Borreca, Senior Managing Director and co-head of Energy at Stonepeak, said: “Lubricants are a mission-critical product, which are essential to the safe and efficient functioning of virtually every vehicle, machine, and industrial process in the world. Castrol’s 126-year heritage has created a leading market position, an iconic brand, and a portfolio of differentiated products that deliver meaningful value to its customers.”
