bp has reached an agreement to sell its Gelsenkirchen refinery and related businesses to Klesch Group, an independent European refiner. The transaction represents a significant milestone in bp’s accelerated strategy, which centres on simplifying its portfolio, strengthening its balance sheet and focusing its downstream operations on its leading integrated businesses.

Expanded Cost Reduction Targets

In conjunction with the announcement, bp has raised its structural cost reduction target to between $6.5 billion and $7.5 billion by 2027, reflecting expected savings of approximately $1 billion in underlying operating expenditure associated with the Gelsenkirchen operations. The revised target equates to around 30 percent of bp’s 2023 cost baseline and marks the second upward revision to the company’s savings ambitions, having initially outlined $4 to $5 billion in February 2025 before increasing the target to $5.5 to $6.5 billion in February 2026 following the strategic review of Castrol.

Financial Impact

The transaction is expected to strengthen bp’s balance sheet, prove free cash flow accretive based on historical performance, and contribute to lowering the cash breakeven for its retained refining portfolio. Transaction terms and associated proceeds remain subject to customary closing adjustments, including for the value of inventory at the time of completion, alongside the transfer of liabilities.

Leadership Commentary

Carol Howle, interim CEO at bp, described the transaction as a deliberate step in the company’s broader transformation: “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.”

Patrick Wendeler, head of country for Germany at bp, acknowledged the refinery’s legacy while expressing confidence in its future under new ownership: “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.”

About the Gelsenkirchen Refinery

The Gelsenkirchen refinery primarily manufactures fuels for vehicles and aircraft, processing approximately 12 million tonnes of crude oil per year. It also supplies essential feedstocks to the petrochemical industry across Germany and Europe.

The deal encompasses the 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 site. To maintain its regional supply requirements, bp has agreed offtake arrangements covering ground fuels, aviation fuel and coke.

The refinery’s experienced workforce ,along with those supporting logistics and sales infrastructure, is expected to transfer to the new owner upon completion. The integrated refinery complex currently employs approximately 1,800 people.

The transaction is subject to regulatory and governmental approvals and is expected to close in the second half of 2026.

For more information visit www.bp.com