BP’s share price was slightly up on Wednesday after it announced the sale of a majority stake in its lubricant business to a US investment firm in a deal valuing the unit at $10.1bn (£7.5bn).
The FTSE 100 oil giant kicked off the sale process in February, and New York-based Stonepeak has agreed to buy a 65 per cent stake in Castrol.
Castrol provides lubricants for motorists, as well as for commercial vehicles and the industrial sector, including manufacturing.
The listed group said in a press statement that the sale is expected to raise around $6bn (£4.4bn) in net proceeds for BP.
Once the deal is completed, expected by the end of 2026, BP will retain a 35 per cent ownership stake in a joint venture with Stonepeak.
BP said the sale was an “important milestone” in its plans to overhaul the business and strip out costs.
Focus on reducing debt
BP has been ramping up overhaul efforts by selling off parts of the business to raise cash.
It is targeting the sale of $20bn (£14.8bn) of assets to help reduce its debt pile, with around $11bn (£8.1bn) already announced or raised. BP said all proceeds from this transaction will be allocated to reducing net debt towards BP’s target of $14-18bn by the end of 2027.
The divestment proceeds guidance for 2025 is over $4bn, of which $1.7bn has been received as of the third quarter 2025 results, with the remainder expected to be accepted by year-end 2025.
Commenting on today’s news, Carol Howle, BP’s interim chief executive, said the agreed sale of Castrol was “a very good outcome for all stakeholders”.
“We concluded a thorough strategic review of Castrol, that generated extensive interest and resulted in the sale of a majority interest to Stonepeak. And 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,” she stated.
This move comes as BP announced last week the appointment of Meg O’Neill as its new chief executive after the abrupt departure of boss Murray Auchincloss, who was in the position for just two years.