Global energy giant bp has announced a deal to sell its Gelsenkirchen refinery and related businesses to Klesch Group, an independent European refiner, marking another key step in the company’s strategic overhaul. The move is part of BP’s effort to simplify its portfolio, strengthen its balance sheet, and focus its downstream operations on leading integrated businesses.

 

The sale is expected to contribute around $1 billion in underlying operating expenditure savings from Gelsenkirchen, helping BP push its 2027 structural cost reduction target to $6.5–$7.5 billion—roughly 30% of its 2023 cost baseline. This is the second increase in the company’s target, following $5.5–$6.5 billion set in February 2026, up from $4–$5 billion in February 2025, reflecting gains from the strategic review of Castrol.

 

The transaction is free cash flow accretive based on historical performance and will help lower BP’s cash breakeven for its remaining refining portfolio. Final terms and proceeds will include customary closing adjustments, such as the value of inventory at completion.

 

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.”

 

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 processes around 12 million tonnes of crude oil per year, producing fuels for vehicles and aircraft, as well as essential feedstocks for the petrochemical industry across Germany and Europe.

 

The deal includes the Gelsenkirchen refinery and Bottrop tank farm, DHC Solvent Chemie GmbH, interests in logistics joint ventures, and marketing businesses linked to petrochemicals and unbranded B2B fuels. BP will maintain regional supply through offtake arrangements covering ground fuels, aviation fuel, and coke.