BP to sell 65% stake in Castrol to Stonepeak for $6 billion

BP has agreed to sell 65 per cent stake in Castrol to US-based investment firm Stonepeak for $6 billion, in a deal that values the engine oil maker at $10 billion. BP will retain the remaining 35 per cent stake in Castrol.

The deal includes minority interests of $1.8 billion, a major chunk of which relates to shareholding in public listed Castrol India Limited (49 per cent), as also other operational jurisdictions like Vietnam, Saudi Arabia, Thailand etc.

It also includes external obligations of around 0.3 billion. 

BP proposes to utilise the net proceeds of nearly $6 billion, which includes accelerated dividend payments, to reduce debt. The net proceeds include $0.8 billion as pre-payment of future dividend income on the 35 per cent remaining stake, after adjustments. 

Following the transaction, Castrol will be incorporated as a joint venture between Stonepeak and BP, with Stonepeak owning 65 per cent stake and BP the remaining 35 per cent. 

While the 35 per cent remaining stake in the joint venture will continue to give BP an exposure to Castrol’s growth plan, it has the option to offload the stake after a two-year lock-in period.

The deal is part of BP’s reorganisation strategy, under which it would focus on downstream projects to give a big boost to the company’s balance sheet.

BP has set a target of bringing down its net debt to $14-18 billion by end-2027. The oil major had a net debt of $26.1 billion at the close of the third quarter of 2025.

In February, BP announced plans to sell off assets worth $20 billion and shift focus to its core crude oil and gas business. With completed and announced divestment, BP’s total divestment proceeds to date stands at around $11.0 billion, which is more than half that target.

BP expects the transaction to be completed by end of 2026, subject to regulatory approvals.