BP to sell majority stake in Castrol to Stonepeak for £4bn

BP has announced the sale of a majority stake in its lubricants business to a US investment firm in a deal valuing the unit at 10.1 billion US dollars (£7.5 billion), hailing the move as a “milestone” in its plans to strip out costs.

New York-based Stonepeak has agreed to buy a 65% stake in Castrol.

Castrol provides lubricants for motorists as well as for commercial vehicles and industrial sectors such as manufacturing.

The sale is expected to raise around six billion US dollars (£4.4 billion) in net proceeds for BP, it said.

Once the deal is completed, which is expected by the end of 2026, BP will retain a 35% ownership in a joint venture with Stonepeak.

BP said the sale was an “important milestone” in its plans to overhaul the business and strip out costs.

The oil giant has been ramping up overhaul efforts by selling off parts of the business to raise cash and run a more simplified group.

It is targeting the sale of 20 billion dollars (£14.8 billion) of assets to help reduce its debt pile – with around 11 billion dollars (£8.1 billion) already announced or raised.

Carol Howle, BP’s interim chief executive, said the agreed sale of Castrol was “a very good outcome for all stakeholders”.

“The sale marks an important milestone in the ongoing delivery of our reset strategy,” she said.

“We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan.”

BP announced last week the appointment of Meg O’Neill as its new chief executive after the abrupt departure of boss Murray Auchincloss.

Mr Auchincloss was in the top job for less than two years, overseeing the company’s decision to “reset” its strategy by scaling back renewables projects and renewing its focus on oil and gas.

Ms O’Neill will be the first woman to run BP and the first outsider to take up the post, having headed up Australian oil and gas firm Woodside Energy since April 2021.