In a major strategic move, British oil giant BP has agreed to sell a controlling stake in its iconic Castrol lubricants business to a New York-based investment firm. The deal, announced on Wednesday 24 December 2025, values the entire Castrol unit at a substantial $10.1bn (£7.5bn).
A Strategic Divestment for Debt Reduction
The agreement will see investment firm Stonepeak acquire a 65 per cent stake in Castrol. BP expects the sale to generate approximately $6bn (£4.4bn) in net proceeds. Following the completion of the transaction, anticipated by the end of 2026, BP will retain a 35 per cent shareholding, forming a joint venture with Stonepeak to manage the business.
This sale marks a significant step in BP's ongoing plan to streamline its operations and strengthen its financial position. The FTSE 100-listed group initiated the formal sale process for Castrol back in February 2025. The lubricant brand is a major global player, providing products for everyday motorists, commercial vehicles, and a wide range of industrial and manufacturing sectors.
Accelerating a $20bn Asset Sale Programme
The Castrol transaction is a cornerstone of BP's broader strategy to divest $20bn (£14.8bn) worth of assets. This programme is designed to help the company reduce its debt burden and create a more focused, simplified organisation. To date, BP has announced or completed sales totalling around $11bn (£8.1bn), meaning the Castrol deal pushes the firm past the halfway point of its target.
BP confirmed that all proceeds from this specific deal will be directed towards reducing its net debt. The company aims to bring this debt down to between $14bn and $18bn by the close of 2027. For the 2025 financial year alone, BP's divestment proceeds guidance stands at over $4bn, with $1.7bn already received by the third quarter.
Leadership Endorsement Amid Executive Changes
Carol Howle, BP's interim chief executive, hailed the agreement as "a very good outcome for all stakeholders." She stated that a thorough strategic review of Castrol had attracted extensive interest, culminating in the sale to Stonepeak. "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," Howle commented.
This significant corporate development follows closely on the heels of a leadership change at the top of BP. Last week, the company announced the appointment of Meg O'Neill as its new chief executive, succeeding Murray Auchincloss, who departed abruptly after just two years in the role.
The market reacted positively to the news of the Castrol sale, with BP’s share price edging slightly higher on Wednesday morning following the announcement.
