Stonepeak to Become Castrol Majority Owner

BP PLC has signed a deal to sell 65 percent of the Castrol lubricants brand to Stonepeak Partners LP, toward its divestment aim of $20 billion by 2027, the companies said Wednesday.

Castrol would become a joint venture under which BP retains 35 percent. “Following a two-year lock-up period, BP has optionality to sell its 35 percent stake in Castrol”, said a joint statement online.

The transaction values Castrol at $10.1 billion. Net proceeds for the British energy giant would be around $6 billion, the statement said.

“The sale is part of BP’s previously announced $20 billion divestment program and brings completed and announced divestment proceeds to date to around $11 billion”, the statement said.

“All proceeds from this transaction will be allocated to reducing net debt towards BP’s target of $14-18 billion by end 2027. As of the end of 3Q 2025 BP’s net debt was $26.1 billion.

“Divestment proceeds guidance for 2025 is over $4 billion, of which $1.7 billion has been received as at 3Q25 results, with the remainder expected to be received by yearend 2025”.

BP interim chief executive Carol Howle said, “We concluded a thorough strategic review of Castrol, that generated extensive interest and resulted in the sale of a majority interest to Stonepeak. The transaction allows us to realize value for our shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum”.

“We are reducing complexity, focusing the downstream on our leading integrated businesses and accelerating delivery of our plan”, Howle added. “And we are doing so with increasing intensity – with a continued focus on growing cash flow and returns, and delivering value for our shareholders”.

Anthony Borreca, senior managing director and energy co-head at New York City-based Stonepeak, said, “Castrol’s 126-year heritage has created a leading market position, an iconic brand and a portfolio of differentiated products that deliver meaningful value to its customers”.

The parties expect to complete the transaction by yearend 2026, subject to regulatory approvals.

BP would have two board seats in the new incorporated joint venture, the statement said.

“After the transaction closes, BP expects to treat its retained stake in Castrol as an equity accounted investment, and does not expect to recognize earnings or receive a dividend in the short to medium term”, the statement said. “Stonepeak has a preference on distributions.

“Castrol non-controlling interests share of net income averaged around $100 million per annum since 2019. 

“Since 2023 Castrol’s annual underlying effective tax rate has been on average around 30 percent”.

Net proceeds include about $800 million “for the pre-payment of future dividend income over the short to medium term on BP’s retained 35 percent stake and other adjustments”, the statement said.

It said, “The transaction includes minority interests in Castrol, principally in India (49 percent interest), Vietnam (35 percent), Saudi Arabia (50 percent), Thailand (40 percent) and other jurisdictions”.

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