BP Sells 65 Percent of Castrol, Secures About Six Billion Pounds

BP announced an agreement to sell 65 percent of Castrol to Stonepeak on December 24, 2025, receiving roughly six billion dollars in net proceeds that the company said will be used in full to reduce net debt. The transaction places an implied enterprise value on Castrol of about 10.1 billion dollars, with bp’s own release rounding the figure to 10.0 billion dollars and citing an implied enterprise value to last twelve months EBITDA multiple of approximately 8.6 times.

Under the terms, BP will retain a 35 percent stake in a newly formed joint venture with Stonepeak. BP has an option to sell its remaining 35 percent after a two year lock up period. Canada Pension Plan Investment Board has agreed to invest up to 1.05 billion dollars in support of the transaction, resulting in an indirect, non controlling interest in Castrol through its backing of Stonepeak. The new joint venture is expected to be formed and the business spun off into the joint venture when the deal closes next year, subject to customary regulatory approvals.

The six billion dollars of proceeds will be applied to reduce net debt. BP reported net debt of 26.1 billion dollars at the end of the third quarter. Applying the proceeds would lower that figure to about 20.1 billion dollars, narrowing the gap to BP’s stated net debt target range of 14 to 18 billion dollars by the end of 2027 but leaving further reductions necessary to reach the target. BP has described the Castrol sale as the culmination of a strategic review and a milestone in its broader reset strategy to simplify the portfolio and focus on downstream oil and gas activities.

The deal is the largest announced so far in BP’s program to divest about 20 billion dollars of assets by the end of 2027. It follows recent transactions that include the sale of non controlling interests in U.S. shale midstream assets for 1.5 billion dollars and ongoing exploration of options for selling half of solar developer Lightsource BP. The transaction highlights strong private capital interest in corporate divestments, at a time when private equity and infrastructure investors hold substantial uncommitted capital.

Market participants will watch how the transaction affects both BP’s credit metrics and Castrol’s investment path. The sale converts a strategic brand into a mostly privately owned business that Stonepeak and its backers say can accelerate investment under a more independent ownership model. For BP, the operation converts an established lubricant division into immediate balance sheet relief and a retained stake that could be monetized after the lock up period, while allowing the company to concentrate resources on its core downstream operations as it prepares for a change in leadership next spring. Meg O’Neill is slated to become BP chief executive on April 1, 2026. Closing remains subject to customary conditions and regulatory approvals.