London: British oil major BP on Wednesday announced it will sell a majority stake in its Castrol lubricants business to US investment firm Stonepeak, as part of a broader push to cut debt and shore up its balance sheet.

BP said the sale of its 65 per cent stake in Castrol will fetch around $6 billion, valuing the lubricants brand at $10.1 billion. The transaction is expected to be completed by the end of 2026.

Following the deal, Castrol will be owned by a joint venture, with BP retaining a minority holding.

“The sale marks an important milestone in the ongoing delivery of our reset strategy,” interim chief executive Carol Howle said in a statement.

The divestment forms part of BP’s plan to sell $20 billion worth of assets by the end of 2027, as the company looks to reverse years of underperformance by refocusing on its core oil and gas business and scaling back clean energy investments.

“We have now completed or announced over half of our targeted $20 billion divestment programme, with proceeds to significantly strengthen BP's balance sheet,” Howle added.

The announcement comes amid a wider leadership shake-up at the energy giant. BP last week appointed industry veteran Meg O’Neill as its next chief executive, effective April, replacing Murray Auchincloss.

O’Neill, an American national, will join BP from her current role as chief executive of Australia-based Woodside Energy.