BP has signed an agreement to divest its Gelsenkirchen refinery and associated businesses in Germany to European refiner Klesch Group for an undisclosed price.
This sale forms part of bp’s wider strategy to simplify its portfolio and focus on its integrated businesses.
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The company has set a revised target for structural cost reductions of $6.5bn (£4.86bn)–7.5bn by 2027, reflecting anticipated annual savings of approximately $1bn in underlying operating expenditure following the transaction.
This target represents around 30% of bp’s 2023 cost baseline. The company initially planned for $4–5bn in savings as announced in February 2025, and raised this target to $5.5–6.5bn last month after a strategic review of Castrol.
The transaction with Klesch Group includes the Bottrop tank farm refinery, the DHC Solvent Chemie business, interests in logistics joint ventures (JVs), and marketing operations related to petrochemicals and unbranded business-to-business fuels produced at Gelsenkirchen.
BP has also arranged offtake agreements to maintain its regional supply of ground fuels, aviation fuel and coke.
The Gelsenkirchen complex processes approximately 12 million tonnes per annum (mtpa) of crude oil. It operates two sites in Horst and Scholven with a crude distillation capacity of 265,000 barrels per day (bpd).
The complex produces jet fuel, diesel, petrol, heating oil and more than 50 other products for the chemical industry. The integrated facility employs around 1,800 people.
BP predicts that the workforce, including those in logistics and sales support, will move to the new owner after completion.
Klesch Group chairman A. Gary Klesch said: “Our strategy is built around the long‑term stewardship of high‑quality refining assets. Gelsenkirchen Refinery fits within that vision and provides a strong foundation for sustainable value creation.
“We want employees to know that their expertise remains central to the refinery’s future success, and we are committed to forging strong partnerships with both them and the works council.”
The deal will remove liabilities related to Gelsenkirchen from bp’s balance sheet, including pension obligations and other provisions.
The sale contributes to bp’s plan to lower its refining cash breakeven point by around $3 per barrel by 2027 compared with 2024 on a like-for-like basis.
As noted in its fourth quarter 2025 results on 10 February 2026, bp had announced or completed more than $11bn of its planned $20bn divestment programme targeted for completion by 2027.
BP interim CEO Carol Howle 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.”
The transaction is subject to regulatory and government approvals and is expected to close during the second half of 2026.
Last month, Turan Drilling & Engineering, a JV between SOCAR AQS and Helmerich & Payne, secured the renewal of a long-term contract from bp for offshore operations and maintenance in the Caspian Sea off the coast of Azerbaijan.
