19 Mar bp to sell Gelsenkirchen refinery to Klesch Group
(Oilandgaspress) – bp today reached an agreement to sell its Gelsenkirchen refinery and related businesses to Klesch Group, an independent European refiner. The transaction represents another significant milestone in bp’s acceleration of its strategy, including simplifying the portfolio, strengthening the balance sheet and focusing the downstream on its leading integrated businesses.
bp is now targeting $6.5 to $7.5 billion of structural cost reductions by 2027, reflecting the expected savings of around $1 billion of underlying operating expenditure associated with Gelsenkirchen. The 2027 cost reduction target now equates to around 30 percent of bp’s 2023 cost baseline. This marks the second time bp has increased its target, having outlined $4 to $5 billion of savings in February 2025, and increased this in February 2026 to $5.5 to $6.5 billion reflecting the outcome of the strategic review of Castrol.
The transaction strengthens bp’s balance sheet, is free cash flow accretive based on historical performance and contributes to lowering bp’s cash breakeven for its retained refining portfolio. In addition to the transfer of liabilities, transaction terms and associated proceeds are subject to customary closing adjustments, including for the value of inventory at time of completion.
The Gelsenkirchen refinery primarily manufactures fuels for vehicles and aircraft, processing roughly 12 million tonnes of crude oil per year. The refinery also supplies essential feedstocks to the petrochemical industry in Germany and across Europe.
The deal includes Gelsenkirchen refinery and Bottrop tank farm; DHC Solvent Chemie GmbH (a subsidiary); interests in logistics joint ventures; and marketing businesses related to petrochemicals and unbranded B2B fuels produced at the Gelsenkirchen refinery. To maintain bp’s regional supply requirements, bp has agreed offtake arrangements covering ground fuels, aviation fuel and coke.
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