BP has agreed to sell a majority stake in its $10bn (£7.4bn) lubricants business Castrol to the US investment company Stonepeak, as the new chair, Albert Manifold, rapidly reshapes the under-pressure oil and gas company.

Stonepeak will acquire a 65% stake in Castrol, in a deal that values the division at $10.1bn including its debt. The deal, in which BP will retain a 35% stake in the business through a joint venture, is expected to close at the end of next year, the company said on Wednesday.

It marks the latest step in BP’s push to sell $20bn in assets as it has faced pressure from the activist US hedge fund Elliott Investment Management to cut costs and reduce debt.

BP said it would use the $6bn in proceeds from the deal to pay down its own debt, which stood at $26.1bn at the end of its latest quarter.

Carol Howle, the interim BP chief executive, said: “With this, we have now completed or announced over half of our targeted $20bn divestment programme, with proceeds to significantly strengthen BP’s balance sheet.

“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.”

BP’s new chair is overseeing a radical overhaul of its strategy after a failed attempt to pivot to renewable energy under his predecessor.

Last week the company made the surprise announcement that it was replacing its chief executive, Murray Auchincloss, after less than two years in the top job. He will be succeeded by Meg O’Neill, the chief executive of Woodside Energy, in April, with Howle taking charge in the interim.

In October, Manifold, the former chief executive of the building materials company CRH, became the chair of the FTSE 100 group. He said last week that O’Neill would help BP become a “simpler, leaner and more profitable company”.

Maurizio Carulli, an analyst at the investment company Quilter Cheviot, described the Castrol deal as “a positive step forward for BP, reinforcing its ongoing strategy reset and the aim to reduce its net debt and refocus its downstream business”.

BP began the sale process for Castrol in February, when Auchincloss announced a strategic reset with a stronger focus on oil and gas and promising to cut costs and reduce debt.

The Castrol business includes lubricants for the auto and industrial sectors, and has been developing liquid cooling fluids for datacentres.

BP’s continued stake in the business gives it exposure to Castrol’s “growth plan”, it said. The company has the option to sell its stake after a two-year lock-up period.

Shares rose 0.3% in early trading on Wednesday, and are up by about 6% in the year to date.

Elsewhere, Petrofac, one of the biggest North Sea oil and gas contractors, has agreed to sell its asset solutions business to CB&I, a US industrial designer and manufacturer.

The companies did not disclose the financial details of the deal in an announcement made on Wednesday, though it will be welcome news for Petrofac, which filed for administration in October. The company, which employs about 7,300 people, said 3,000 are expected to join CB&I when the deal closes, which should be in the first quarter of 2026.