BP to Use $6 Billion From Sale of 65% Stake in Castrol to Cut Debt
Key Facts
BP completed the sale of a 65% stake in Castrol to Stonepeak on November 2, 2026, retaining a 35% stake in a new joint venture, Reuters reported. The company said it will use $6 billion of the proceeds after tax to cut debt and strengthen its financial position. The deal places Castrol among BP’s divestments while allowing the company to remain involved in the business through its remaining stake. Reuters reported that BP’s net debt fell to $13.9 billion, enabling it to reach its debt target a year ahead of schedule. The chief executive said the deal provides cash proceeds for the company while retaining a stake in Castrol’s future growth.
BP said the proceeds will be used entirely to reduce net debt. The amount includes about $800 million in an upfront payment against future dividend income on BP’s 35% stake, over the short to medium term, according to the company’s filing with the U.S. Securities and Exchange Commission. The deal therefore combines immediate cash proceeds for the company with continued participation in the joint venture. The remaining stake gives BP scope to benefit from Castrol’s growth, as the chief executive noted when announcing completion of the deal. She said: "This deal provides BP with significant cash proceeds today, while retaining a valuable stake in Castrol’s future growth."
When it announced the agreement in December 2025, BP described the stake sale as part of a divestment program targeting $20 billion. It said at the time that it had completed or announced more than half of the target. This puts the Castrol deal within a broader plan to reshape the company’s assets, while its stated use of the proceeds is directed toward debt reduction. BP also said Castrol had recorded nine consecutive quarters of year-on-year profit growth before the agreement was announced. That performance helps explain why BP retained a stake in the joint venture while monetizing part of its ownership.
Castrol operates in 150 countries, with about 20 blending plants and more than 100 third-party facilities and warehouses, according to Stonepeak’s announcement of the deal in December 2025. This operating network spans multiple markets and facilities, while Stonepeak became the controlling shareholder after completing the acquisition. BP, meanwhile, retains a 35% stake in the new joint venture. After a two-year lock-up period from completion of the deal, BP will have the option to sell its remaining stake, according to its filing with the U.S. Securities and Exchange Commission. The arrangement gives the company a later option regarding its ownership, without changing the announced use of the deal proceeds to reduce debt.