BP has agreed to sell a 65% stake in its motor oil division Castrol to New York-based investment firm Stonepeak in a deal valued at $10.1 billion (£7.5 billion). The sale, which will provide BP with $6 billion in cash, is part of the company’s ongoing plan to streamline operations and focus on its core oil and gas business.
Castrol, a leading producer of lubricants for cars, motorcycles, and industrial vehicles, has been under BP’s control since 2000. Following the transaction, BP will retain a 35% stake in the division. The company said the deal represents a “milestone” in its strategy to simplify its business and reduce costs.
In February, BP announced a broader plan to sell $20 billion (£15 billion) of assets to strengthen its balance sheet and concentrate on crude oil and gas operations. The Castrol sale moves the company more than halfway toward that target. Proceeds from the deal will be used to pay down debt, which analysts said could improve investor confidence in the firm.
The sale marks a shift in BP’s strategy, which had previously included significant investment in green energy. Pressure from investors, who were concerned about lagging profits and share performance compared with rivals, has led the company to refocus on traditional oil and gas operations. Similar moves have been seen at Shell and Norway’s Equinor, with fossil fuel investment gaining renewed attention amid global calls for increased oil production.
The timing of the Castrol deal follows recent leadership changes at BP. Meg O’Neill will become the company’s first female chief executive in April 2026, a surprise appointment made just three months after Albert Manifold was named chairman. The leadership changes come less than two years after Murray Auchincloss succeeded Bernard Looney as chief executive.
Wednesday’s transaction is the latest in a series of divestments by BP, which has recently sold its US onshore wind energy business and its Dutch mobility and convenience operations. Interim chief executive Carol Howle described the Castrol sale as “a very good outcome for all stakeholders,” adding that it would help reduce complexity and accelerate delivery of the company’s strategic plan.
Russ Mould, investment director at AJ Bell, said the deal is “an early Christmas present” for BP shareholders. “The significant proceeds from the transaction will allow BP to make a decent dent in its onerous borrowings pile. It also means it is well on the way to achieving its goal of $20 billion worth of divestments by 2027,” he said.
Shares in BP opened higher on Wednesday following the announcement, though much of the initial gain was later trimmed. Analysts said the sale strengthens BP’s financial position and signals a renewed focus on oil and gas, with potential long-term benefits for profitability and shareholder returns.
