Oil giant BP to sell 65% of its stake in Castrol to US-based Stonepeak

British oil giant BP announced Wednesday that it has reached an agreement to sell its 65% stake in Castrol to US-based Stonepeak for $10.1 billion.

"The transaction represents a significant milestone in bp's commitment to accelerate its strategy, including simplifying the portfolio, strengthening the balance sheet, and focusing the downstream on its leading integrated businesses," the company said in a statement.

About $6 billion in net proceeds are anticipated for BP as a result of the sale, including about $800 million for the pre-payment of future dividend income on the company's remaining 35% stake over the short to medium term and other adjustments.

The firm said that the deal is a component of BP's previously disclosed $20 billion divestment program, bringing the total amount of completed and disclosed divestment profits to around $11 billion.

All of the transaction's profits will go toward lowering net debt in order to help the firm reach its goal of $14-$18 billion by the end of 2027.

"The transaction allows us to realise value for our shareholders, generating significant proceeds while continuing to benefit from Castrol's strong growth momentum. And with this, we have now completed or announced over half of our targeted $20 billion divestment programme, with proceeds to significantly strengthen bp's balance sheet," said BP Interim CEO Carol Howle.

"The sale marks an important milestone in the ongoing delivery of our reset strategy. We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan. And we are doing so with increasing intensity-with a continued focus on growing cash flow and returns, and delivering value for our shareholders," Howle added.