bp further simplifies portfolio with agreement to sell Gelsenkirchen refinery to Klesch Group

bp has reached an agreement to sell its Gelsenkirchen refinery and related operations to Klesch Group, an independent refiner in Europe. This move marks another key step in bp’s strategy to streamline its portfolio, strengthen its balance sheet, and focus its downstream segment on core integrated businesses.

As part of this strategy, bp is now targeting structural cost reductions of $6.5 billion to $7.5 billion by 2027, including approximately $1 billion in expected savings from reduced operating expenses tied to the Gelsenkirchen assets. This updated target represents about 30% of bp’s 2023 cost base and reflects a continued increase from previous goals—initially set at $4–$5 billion in February 2025 and later revised to $5.5–$6.5 billion in February 2026 following the strategic review of Castrol.

The transaction is expected to strengthen bp’s financial position, improve free cash flow based on past performance, and lower the company’s cash breakeven for its remaining refining portfolio. The final terms, including proceeds, will be subject to standard closing adjustments, such as the valuation of inventory at the time of completion, along with the transfer of associated liabilities.

Carol Howle, interim CEO at bp, said: “With this transaction, we are strengthening our balance sheet, increasing our structural cost reduction target, and increasing the resilience of our focused refining portfolio. We will continue to take decisive action to reduce portfolio complexity – with a continued focus on growing cash flow and returns and delivering value for our shareholders.”

“With this transaction, we are strengthening our balance sheet, increasing our structural cost reduction target, and increasing the resilience of our focused refining portfolio.”

 - Carol Howle, bp interim CEO 

Patrick Wendeler, head of country for Germany at bp, added: “We have a long history of operating successful assets and brands in Germany, and we are deeply grateful for the refinery’s decades of contribution to our business. We are confident that Klesch Group’s experience in refining makes them the right owner for Gelsenkirchen’s next chapter.” 

The Gelsenkirchen refinery mainly produces fuels for road transport and aviation, processing approximately 12 million tonnes of crude oil each year. It also plays a key role in supplying feedstocks to the petrochemical sector in Germany and across Europe.

The transaction includes the Gelsenkirchen refinery and the Bottrop tank farm, along with DHC Solvent Chemie GmbH (a subsidiary), stakes in logistics joint ventures, and marketing operations related to petrochemicals and unbranded B2B fuels produced at the site. To ensure continued regional supply, bp has secured offtake agreements covering ground fuels, aviation fuel, and coke.

Employees currently working at the integrated refinery complex—including those in logistics and sales support—are expected to transfer to the new owner upon completion. The site presently employs around 1,800 people.

Pending regulatory and government approvals, the deal is anticipated to be finalized in the second half of 2026.