BP closes $6bn Castrol stake sale

BP has finalized the sale of a 65% stake in its Castrol lubricants business to Stonepeak, generating $6 billion in after-tax proceeds. The transaction is being used to further reduce BP’s financial obligations, consistent with its priority of strengthening the balance sheet. The deal values Castrol at about $10.1 billion on an enterprise-value basis and forms part of BP’s broader divestment strategy.

Under the agreement, the 65% interest sold to Stonepeak is held within a newly formed joint venture. BP retains a 35% stake in this structure, giving it continued economic exposure to Castrol while transferring operational control and majority ownership to Stonepeak.

Castrol will now operate as a standalone company with its own management, governance and strategic priorities. BP’s remaining 35% stake will be treated as an equity-accounted investment on its balance sheet. BP does not expect to recognize earnings or receive dividends from this stake in the short to medium term because Stonepeak holds a preference on distributions.

Total proceeds of $6 billion to BP include around $0.8 billion related to the pre-payment of future dividend income on BP’s retained 35% stake, along with other customary transaction adjustments. Castrol’s non-controlling interests share of net income averaged around $100 million per year between 2019 and 2025, and on BP’s balance sheet these non-controlling interests were recognized at about $0.45 billion as of 30 September 2026.

Castrol’s debt-like obligations on BP’s balance sheet were recognized at around $0.3 billion as of 30 September 2026. Following a two-year lock-up period, BP will have optionality to sell its 35% stake, providing potential future flexibility in its portfolio management.

The transaction includes minority interests in Castrol businesses in several countries. These interests comprise stakes of 49% in India, 35% in Vietnam, 50% in Saudi Arabia, 40% in Thailand and additional holdings in other jurisdictions. These local interests are part of the overall Castrol platform that now sits within the joint venture controlled by Stonepeak.

Castrol is positioned to pursue its growth strategy as an independent entity. The company’s activities span areas such as advanced mobility solutions and data centre cooling, and it continues to operate with trusted brands, established customer relationships and a dedicated management team as it enters its next phase under the new ownership structure.

BP has framed the transaction as consistent with its aim to build a simpler and stronger company, emphasizing balance sheet resilience. The cash inflow from the sale contributes to its divestment and debt-reduction programme while allowing it to participate in Castrol’s future performance through the retained minority stake.

Castrol’s leadership highlights that the business begins this new chapter from a position of strength, pointing to its clear strategy for growth and its intention to deliver greater value for stakeholders together with Stonepeak and a newly formed board. The standalone structure is intended to give Castrol greater independence to accelerate its next phase of delivery.