bp has entered into an agreement to sell its Gelsenkirchen refinery and associated businesses in Germany to Klesch Group, an independent European refining company. The transaction represents a key step in bp’s ongoing strategy to simplify its portfolio, strengthen its balance sheet, and focus its downstream operations on core integrated businesses.
The divestment is expected to contribute to bp’s enhanced cost reduction targets, with the company now aiming to achieve $6.5 billion to $7.5 billion in structural cost savings by 2027. This includes approximately $1 billion in annual operating expenditure associated with the Gelsenkirchen asset. The revised target reflects a significant increase from earlier projections and underscores bp’s commitment to improving efficiency and financial resilience.
The transaction is expected to be accretive to free cash flow based on historical performance and will help lower bp’s cash breakeven across its remaining refining portfolio. In addition to the transfer of operational assets, the deal includes associated liabilities such as pension obligations and provisions, further strengthening bp’s financial position. Final transaction terms remain subject to customary adjustments, including inventory valuation at completion.
Carol Howle, interim Chief Executive Officer of bp, said the agreement supports the company’s efforts to reduce portfolio complexity while enhancing returns and long-term value. She noted that bp will continue to take decisive steps to streamline operations and focus on high-performing assets.
Patrick Wendeler, bp’s head of country for Germany, highlighted the refinery’s long-standing contribution to the company’s operations and expressed confidence in Klesch Group’s expertise to lead the asset into its next phase.
The Gelsenkirchen refinery, one of Germany’s key refining and petrochemical hubs, processes approximately 12 million tonnes of crude oil annually, with a capacity of around 265,000 barrels per day. It produces a wide range of fuels, including petrol, diesel, and aviation fuel, as well as feedstocks for the petrochemical industry. The transaction also includes the Bottrop tank farm, DHC Solvent Chemie GmbH, interests in logistics joint ventures, and related marketing businesses.
bp has secured offtake agreements for key products to maintain supply continuity in the region. The refinery’s workforce of around 1,800 employees, along with supporting logistics and sales teams, is expected to transition to the new owner upon completion.
Subject to regulatory and governmental approvals, the transaction is anticipated to close in the second half of 2026. The move aligns with bp’s broader divestment programme and its objective to build a more focused and resilient energy portfolio.
