BP Nears $6 Billion Deal to Sell 65% Majority Stake in Castrol Lubricants to Infrastructure Firm Stonepeak
BP PLC is nearing a definitive agreement to sell a majority stake in its globally recognized Castrol lubricants business to the infrastructure investment firm Stonepeak. The transaction is set to provide BP with approximately $6 billion in proceeds from the sale of a 65% stake, according to reports published on Wednesday, citing people familiar with the matter.
The divestiture represents a significant step in BP's strategy to optimize its asset base. The deal structure implies a total enterprise valuation for the entire Castrol division of approximately $10 billion, including debt. Stonepeak, known for its focus on large-scale infrastructure assets, will assume operational control of the lubricants unit, while BP retains a minority interest.
Strategic Divestment Generates Substantial Capital
The sale of a majority stake in Castrol is consistent with BP's broader strategy of reshaping its portfolio to fund future investments and reduce debt. Castrol, a brand synonymous with motor oil and industrial lubricants, has long been a stable, high-margin business, but its sale signals BP’s commitment to prioritizing core energy transition projects.
The $6 billion cash injection provides BP with substantial capital flexibility. While the company has not publicly detailed the specific allocation of these funds in relation to the Castrol sale, such proceeds typically support share buybacks, debt reduction, or investment in lower-carbon energy ventures, aligning with the company’s long-term strategic goals.
The deal, which values the entire Castrol division at $10 billion including debt, underscores the continued demand for stable, global infrastructure assets among private equity firms like Stonepeak.
Stonepeak’s Focus on Energy and Logistics Infrastructure
The buyer, Stonepeak, is a prominent player in the infrastructure investment space, managing approximately $76 billion in assets under management. The acquisition of a majority stake in Castrol fits well within Stonepeak’s established investment mandate, which targets essential, long-life assets.
- Stonepeak typically invests across three main sectors: logistics, energy, and digital infrastructure businesses.
- Past investments have included assets ranging from gas pipelines and water desalination plants to data center firms.
- The firm is co-founded and led by CEO Michael Dorrell, who previously helped grow investment bank Macquarie's U.S. infrastructure business.
For Stonepeak, the Castrol acquisition provides a stable, global platform with established distribution networks and strong brand recognition, classifying it as a critical logistics and energy-adjacent infrastructure asset.
Market Context and Forward View
The news of the impending sale follows a period of strategic review for BP, as the company seeks to balance its traditional oil and gas operations with its commitment to transitioning to a lower-carbon energy mix. Divesting non-core assets like Castrol helps streamline operations and focus management resources.
The transaction highlights the robust appetite among infrastructure funds for mature, cash-generating assets that offer predictable returns, even if they are outside the traditional definition of physical infrastructure like roads or utilities. The valuation of $10 billion for the entire unit reflects the premium placed on Castrol’s global footprint and profitability.
While the final terms are still being negotiated, the consensus among financial analysts is that the deal is highly likely to close, given the advanced stage of discussions reported by major financial news outlets. Investors will be watching for BP's official announcement and subsequent guidance on how the $6 billion in proceeds will impact the company's financial framework and capital expenditure plans for the coming quarters.
