BP (NYSE: BP) has agreed to sell a 65% stake in its Castrol lubricants business to Stonepeak, valuing the unit at approximately $10.1 billion and creating a new joint venture between the two companies.

Under the terms of the agreement, BP  will retain a 35% ownership stake in Castrol and has the option to sell its remaining interest after a two-year lock-up period. BP expects to receive around $6 billion in net proceeds from the transaction. The deal is subject to regulatory approvals and is expected to close by the end of 2026.The divestment aligns with BP’s broader strategy to streamline its portfolio, reduce debt, and focus capital on higher-return businesses. The company previously announced plans to divest $20 billion of assets, and with the Castrol transaction included, BP now has $11 billion of divestments planned or completed.

Following the sale, BP expects to reduce its net debt to a range of $14 billion to $18 billion by the end of 2027, down from $26.1 billion reported in its third-quarter earnings update.Interim Chief Executive Carol Howle said the transaction marks significant progress in BP’s asset-sale program and will materially strengthen the company’s balance sheet.

The sale values Castrol at $10.1 billion, confirming its position as one of BP’s most valuable non-core assets. Earlier this year, the business attracted interest from a range of strategic and financial buyers, including global energy companies and private equity firms, according to market reports.By partnering with Stonepeak, BP is maintaining exposure to Castrol’s long-term performance while accelerating cash generation to support its financial reset.

BP said the transaction reflects its intent to exit lower-return or non-strategic businesses while improving investor appeal and long-term shareholder value. The company believes the divestment program will provide greater financial flexibility as it reshapes its portfolio.

About BP

BP p.l.c. (NYSE: BP) is a global energy company headquartered in London, operating across oil, gas, refining, trading, and low-carbon energy solutions. The company is pursuing a strategic reset focused on capital discipline, portfolio simplification, and balance sheet strength while maintaining selective investment in higher-return businesses.

About Stonepeak

Stonepeak is a U.S.-based alternative investment firm specializing in infrastructure and real assets, with investments across energy, transportation, digital infrastructure, and industrial sectors. The firm focuses on long-term partnerships with businesses that generate stable cash flows and offer opportunities for operational growth.

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.