British energy major BP plc has reached an agreement to sell a majority stake — roughly 65 per cent — in its Castrol lubricants business to U.S. investment firm Stonepeak Partners as part of a strategic effort to streamline operations and strengthen its balance sheet. The transaction values the Castrol unit at approximately US$10.1 billion, and BP is expected to receive around US$6 billion in net proceeds once the deal closes.

Under the terms of the deal, Stonepeak will take control of the bulk of the Castrol unit, while BP will retain a 35 per cent ownership stake in a newly formed joint venture that will oversee the lubricants business going forward. BP also has an option to sell its remaining portion after a two-year lock-up period, giving it flexibility to further reduce exposure to the unit later.

The Castrol division, widely known for producing automotive and industrial lubricants, greases, and specialty fluids used across global markets, is considered one of the most recognised brands in the sector. It operates internationally, with products marketed in more than 150 countries and applications ranging from consumer vehicles to heavy industrial equipment.

BP’s decision to divest the controlling interest in Castrol forms part of a broader divestment strategy intended to raise cash and simplify its corporate structure. The company has previously announced plans to sell off up to US$20 billion in assets by 2027 to reduce debt and refocus on its core operations. Proceeds from the Castrol sale are earmarked in large part for net debt reduction, improving BP’s financial flexibility and credit profile.

The transaction also includes minority interests in regional operations, with entities such as Castrol India and other international affiliates embedded within the deal structure. Reports indicate that shares of Castrol’s Indian subsidiary have already reacted positively to the news, reflecting investor optimism around the transaction and its implications for future growth.

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The sale is expected to be completed by the end of 2026, contingent on customary regulatory approvals. In retaining a minority stake, BP retains exposure to Castrol’s revenue potential while shifting majority control to Stonepeak, which will lead the business through its next phase of development.

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Overall, the deal marks a significant milestone in BP’s ongoing corporate restructuring, providing immediate capital and helping the company reshape its portfolio amid evolving energy market conditions and strategic priorities.