BP sells Gelsenkirchen refinery to Klesch, lifts cost-cut target to $6.5–7.5bn
BP will sell its Gelsenkirchen refinery and related assets to Klesch Group, divesting a two-site complex processing 12 million tonnes per annum with 265,000 barrels per day capacity and 1,800 employees. The deal supports an updated $6.5–7.5 billion structural cost reduction target by 2027, yielding roughly $1 billion annual opex savings.
1. Asset Divestment Agreement
BP has signed an agreement to sell its Gelsenkirchen refinery and associated operations in Germany to the Klesch Group for an undisclosed price. The transaction includes the Bottrop tank farm, DHC Solvent Chemie, logistics joint venture interests, and petrochemical and unbranded fuels marketing, transferring a two-site complex processing 12 mtpa crude with 265,000 bpd capacity and 1,800 employees.
2. Updated Cost Reduction Targets
BP has revised its structural cost reduction target to $6.5–7.5 billion by 2027, up from $5.5–6.5 billion last month and the initial $4–5 billion. The company expects approximately $1 billion in annual underlying operating expenditure savings following completion, representing around 30% of its 2023 cost baseline.
3. Balance Sheet and Breakeven Improvements
The divestment will remove pension obligations and other liabilities from BP's balance sheet, and is projected to lower its refining cash breakeven point by about $3 per barrel by 2027. This deal contributes to more than $11 billion of a $20 billion divestment programme that BP has announced or completed ahead of its 2027 target.