Global energy giant bp has completed the sale of its Gelsenkirchen refinery and related businesses in Germany to Klesch Group.
This marks another step in the energy giant’s drive to simplify its portfolio, strengthen its balance sheet and focus investment on higher-value assets.
The deal transfers the refinery’s assets and liabilities to Klesch Group and is expected to reduce bp’s underlying operating expenditure by around $1 billion, while supporting the company’s strategy of disciplined capital allocation.
Richard Harding, interim executive vice president of Downstream at bp, said: “This deal strengthens our balance sheet and simplifies our portfolio. By concentrating our capital on the assets and markets where bp can be most competitive, we are building a higher-value, more resilient downstream business that continues to supply the fuels and products our customers rely on.”
bp said the transaction is expected to be free cash flow accretive based on historical performance and removes liabilities linked to the divested business, including pension obligations, provisions and other short-term liabilities.
The Gelsenkirchen refinery, which includes integrated refining and petrochemical operations at the Horst and Scholven sites as well as the Bottrop tank farm, has played a key role in supplying fuels and petrochemical products across western Germany.
Patrick Wendeler, head of country for Germany at bp, said: “Gelsenkirchen plays an important role in supplying western Germany with fuels and petrochemicals. With its refining experience and established presence in Germany, Klesch Group is well placed to take Gelsenkirchen into its next chapter. bp will continue to support customers in Germany through its businesses, including Aral.”
The sale follows bp’s assessment that a new owner would be better positioned to secure the refinery’s long-term future. All employees at the refinery and associated businesses have transferred to Klesch Group as part of the agreement.
The refinery processes around 12 million tonnes of crude oil annually and has a crude distillation capacity of 265,000 barrels per day, producing petrol, diesel, jet fuel, heating oil and more than 50 other products, many of which support Germany’s chemical industry.
The move leaves bp with a refining portfolio of five strategic refineries serving key markets worldwide, including Cherry Point and Whiting in the United States, and Castellón, Lingen and Rotterdam in Europe.
Klesch Group, an independent refiner founded in 1990 by chairman A. Gary Klesch, will take ownership of the Gelsenkirchen operations as part of its expanding European refining business.
