BP has agreed to sell a 65% shareholding in its Castrol lubricants business to infrastructure investor Stonepeak at an enterprise value of $10.1bn, the energy major announced 24 December.

The transaction will generate net proceeds of approximately $6bn for BP, including around $800m for the pre-payment of future dividend income on BP's retained 35% stake and other adjustments. BP said all proceeds will be used to reduce net debt.

The deal values Castrol at an enterprise value to last twelve months EBITDA multiple of around 8.6 times. The implied total equity value of Castrol is $8bn after deducting joint venture minority interests totaling $1.8bn, and other debt-like obligations of around $300m, subject to customary adjustments.

A new joint venture will be incorporated upon completion, with Stonepeak holding 65% and BP retaining 35%. BP will have the option to sell its remaining stake after a two-year lock-up period.

Carol Howle, interim CEO at BP, said: "The transaction allows us to realise value for our shareholders, generating significant proceeds while continuing to benefit from Castrol's strong growth momentum. And with this, we have now completed or announced over half of our targeted $20bn divestment programme, with proceeds to significantly strengthen BP's balance sheet."

The sale forms part of BP's previously announced $20bn divestment programme and brings completed and announced divestment proceeds to around $11bn. BP's net debt stood at $26.1bn at the end of the third quarter 2025, with the company targeting a range of $14bn to $18bn by end-2027.

Castrol has reported nine consecutive quarters of year-on-year earnings growth. The business includes minority interests in several markets, principally in India where BP holds a 49% interest, as well as Vietnam (35%), Saudi Arabia (50%), Thailand (40%) and other jurisdictions. A significant proportion of Castrol joint venture minority interests relate to the shareholding in the publicly listed Castrol India Limited.

Castrol is one of the world's leading suppliers of marine lubricants. Earlier this year, it launched a new MHP lubricant range intended for use in the next generation of four-stroke medium-speed engines operating on distillate fuels. And in 2024, the firm launched its TLX range, also for medium-speed four-stroke engines, designed for use with high-sulphur fuel oil (HSFO), very-low-sulphur fuel oil (VLSFO), ultra-low-sulphur fuel oil (ULSFO), and dual-fuel engines operating on residual fuel and gas.

Anthony Borreca, senior managing director and co-head of energy at 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. We are excited to work alongside Castrol's talented employees, coupled with BP's continued guidance as a minority interest holder, as we support the business's continued growth."

After the transaction closes, BP expects to treat its retained stake in Castrol as an equity accounted investment, and does not expect to recognise earnings or receive a dividend in the short to medium term, as Stonepeak has a preference on distributions. BP will appoint two board seats to the new joint venture on closing.

The transaction is expected to complete by end of 2026, subject to regulatory approvals.

BP's divestment proceeds guidance for 2025 is over $4bn, of which $1.7bn had been received as at third quarter results, with the remainder expected to be received by year-end 2025.

Stonepeak is an alternative investment firm specialising in infrastructure and real assets with approximately $80bn of assets under management.