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BP to Sell 65% Stake in Castrol to Stonepeak for $10B EV
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Key Takeaways
BP will divest 65% of Castrol to Stonepeak, forming a joint venture while retaining a 35% stake.
BP aims to cut net debt to $14 to $18B by 2027 as part of an $11B divestment program including Castrol.
BP expects about $6B in net proceeds on a $10.1B enterprise value, with deal closing targeted by 2026-end.
BP p.l.c. (BP - Free Report) agrees to divest 65% of its stake to Stonepeak creating a new joint venture in which BP will currently retain 35% stake. The leading integrated player has the option to sell this remaining stake after a lock-up period of two years. BP estimated the enterprise value to be around $10.1 billion implying it will receive around $6 billion in net proceeds from the sale. BP expects to close the deal by 2026 end following regulatory approvals.
This move aligns with BP’s strategy to reduce its debt profile and focus on more profitable and attractive businesses.
The company had previously announced a goal to divest $20 billion of assets. With the inclusion of the Castrol deal, BP now has $11 billion of divestments planned, some of which have already been completed. Following this transaction, BP expects to reduce its debt to $14-$18 billion (by the end of 2027) from $26.1 billion reported in its third-quarter earnings update.
Notably, BP is divesting non-profitable businesses to strengthen its business model. With a Zacks Rank #3 (Hold), the company believes that, over the long term, these moves will enhance shareholder value and improve investor appeal.
Other key players in the integrated energy space are Exxon Mobil Corporation (XOM - Free Report) , Chevron Corporation (CVX - Free Report) , and Eni S.p.A. (E - Free Report) eachcarrying a Zacks Rank #3 at present. With West Texas Intermediate crude oil price trading below $59 per barrel, the upstream business model of BP, XOM, CVX and E will be under pressure in the coming days
ExxonMobil, headquartered in Spring, TX, is aleading integrated player. ExxonMobil (XOM - Free Report) expects to achieve $25 billion in earnings growth and $35 billion in cash-flow growth by 2030, implying an increase of $5 billion over its prior projections.
Chevron, headquartered in Houston, TX, is one of the largest integrated energy giant that operates across the entire value chain, from crude oil extraction to the refining of finished products. CVX expects to increase its production from 2.6 MMBOED highlighted in 2015 to 3.7 MMBOED by year-end 2025. In December, Chevron (CVX - Free Report) unveiled its 2026 organic capital expenditure plan of $18-$19 billion, representing the lower end of its long-term guidance of $18-$21 billion annually through 2030.
Eni S.p.A.,headquartered in Rome, Italy, also operates across the entire energy value chain, from traditional fossil fuels to emerging energy technologies, with operations spread across the globe. Eni expects its 2025 daily production to be in the range of 1,710-1,720 barrels of oil equivalent, as highlighted in its third-quarter earnings release, suggesting a rise from 1,700 barrels of oil equivalent forecasted in its previous earnings update.
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BP to Sell 65% Stake in Castrol to Stonepeak for $10B EV
Key Takeaways
BP p.l.c. (BP - Free Report) agrees to divest 65% of its stake to Stonepeak creating a new joint venture in which BP will currently retain 35% stake. The leading integrated player has the option to sell this remaining stake after a lock-up period of two years. BP estimated the enterprise value to be around $10.1 billion implying it will receive around $6 billion in net proceeds from the sale. BP expects to close the deal by 2026 end following regulatory approvals.
This move aligns with BP’s strategy to reduce its debt profile and focus on more profitable and attractive businesses.
The company had previously announced a goal to divest $20 billion of assets. With the inclusion of the Castrol deal, BP now has $11 billion of divestments planned, some of which have already been completed. Following this transaction, BP expects to reduce its debt to $14-$18 billion (by the end of 2027) from $26.1 billion reported in its third-quarter earnings update.
Notably, BP is divesting non-profitable businesses to strengthen its business model. With a Zacks Rank #3 (Hold), the company believes that, over the long term, these moves will enhance shareholder value and improve investor appeal.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other key players in the integrated energy space are Exxon Mobil Corporation (XOM - Free Report) , Chevron Corporation (CVX - Free Report) , and Eni S.p.A. (E - Free Report) eachcarrying a Zacks Rank #3 at present. With West Texas Intermediate crude oil price trading below $59 per barrel, the upstream business model of BP, XOM, CVX and E will be under pressure in the coming days
ExxonMobil, headquartered in Spring, TX, is aleading integrated player. ExxonMobil (XOM - Free Report) expects to achieve $25 billion in earnings growth and $35 billion in cash-flow growth by 2030, implying an increase of $5 billion over its prior projections.
Chevron, headquartered in Houston, TX, is one of the largest integrated energy giant that operates across the entire value chain, from crude oil extraction to the refining of finished products. CVX expects to increase its production from 2.6 MMBOED highlighted in 2015 to 3.7 MMBOED by year-end 2025. In December, Chevron (CVX - Free Report) unveiled its 2026 organic capital expenditure plan of $18-$19 billion, representing the lower end of its long-term guidance of $18-$21 billion annually through 2030.
Eni S.p.A.,headquartered in Rome, Italy, also operates across the entire energy value chain, from traditional fossil fuels to emerging energy technologies, with operations spread across the globe. Eni expects its 2025 daily production to be in the range of 1,710-1,720 barrels of oil equivalent, as highlighted in its third-quarter earnings release, suggesting a rise from 1,700 barrels of oil equivalent forecasted in its previous earnings update.