en.Wedoany.com Report on Mar 23rd, BP has signed an agreement with European refiner Klesch Group to sell its Gelsenkirchen refinery and related assets in Germany, with the specific transaction amount undisclosed. This deal is part of BP's strategy to simplify its portfolio and focus on its integrated energy business.
As part of the transaction, BP has revised its structural cost reduction target to $6.5-7.5 billion, expected to be achieved by 2027, reflecting post-transaction annual operating expenditure savings of approximately $1 billion. This target represents about 30% of BP's 2023 cost baseline, higher than the previously announced $5.5-6.5 billion level.
The sale involves the Gelsenkirchen refinery, the Bottrop tank farm, the DHC solvents chemical business, interests in logistics joint ventures, and related marketing operations. BP has also arranged offtake agreements to ensure stable regional supply of fuels and coke. The Gelsenkirchen complex processes approximately 12 million tonnes of crude oil annually, with a distillation capacity of 265,000 barrels per day, producing various fuels and chemical products. It employs around 1,800 people, who are expected to transfer with the transaction.
A. Gary Klesch, Chairman of the Klesch Group, said: "Our strategy is built around the long-term stewardship of high-quality refining assets. The Gelsenkirchen refinery fits this vision and provides a strong foundation for sustainable value creation." "We want employees to know that their expertise is critical to the refinery's future success, and we are committed to building a strong partnership with them and the works council."
This transaction will help BP remove related liabilities from its balance sheet and support its plan to reduce the cash breakeven point of its refining portfolio by approximately $3 per barrel by 2027 compared to 2024 on a like-for-like basis. According to BP's results announced on February 10, 2026, the company has announced or completed over $11 billion of the planned $20 billion in asset divestments targeted for completion by 2027. BP's interim CEO, Carol Howle, said: "With this transaction, we are strengthening the balance sheet, raising our structural cost reduction target, and enhancing the resilience of our focused refining portfolio." "We will continue to take decisive action to reduce portfolio complexity—consistently focused on increasing cash flow and returns to create value for shareholders." The transaction is subject to regulatory and governmental approvals and is expected to be completed in the second half of 2026.
