BP PLC (BP) is cleaning house, and this time it's the lubricants business getting the exit treatment. The energy giant announced it's selling a 65% controlling stake in Castrol to infrastructure investor Stonepeak, valuing the storied brand at roughly $10.1 billion. For BP, it's all about slimming down, cutting debt, and getting back to basics.
The transaction will put about $6 billion in net proceeds into BP's pocket, including an advance tied to dividend income from the 35% stake it's keeping. Every dollar is headed straight toward debt reduction. BP has been pretty explicit about this: simplify the portfolio, shore up the balance sheet, and focus on assets that throw off reliable cash.
This sale didn't come out of nowhere. It follows a strategic review of Castrol and represents a major step in BP's broader $20 billion divestment program. By offloading majority control but keeping a minority stake, BP gets to reduce operational complexity while still participating in Castrol's ongoing performance. And that performance hasn't been shabby: Castrol has posted nine consecutive quarters of year-over-year earnings gains.
The deal is expected to close by the end of 2026, pending the usual regulatory approvals. Once finalized, Castrol will operate as a joint venture with Stonepeak holding 65% and BP retaining 35%. BP will be locked into that stake for two years, after which it can decide whether to stick around or exit further.
