bp to sell German refinery in bid to save US$1bn

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BRITISH oil and gas giant bp has agreed to sell its Gelsenkirchen refinery in Germany to independent refiner Klesch Group as part of plans to reduce structural costs by US$1bn.

The deal forms part of bp’s broader US$20bn divestment programme announced last February and follows the decision in December to sell its 65% stake in Castrol for US$10bn. bp did not disclose the value of the Gelsenkirchen sale. 

bp expects the roughly 1,800-strong workforce at the refinery to remain in place under the new management. Germany-based Klesch, which employs around 1,000 people, focuses solely on refining and has a track record of acquiring assets from major oil and gas companies. It took control of the Kalundborg refinery in Denmark from Equinor in 2022 and the Heide refinery in Germany from Shell in 2010.

Located in western Germany’s industrial Ruhr region, the Gelsenkirchen refinery comprises two sites, including an integrated refining and petrochemical hub and the Bottrop tank farm. It processes around 12m t/y of crude oil and has a production capacity of 265,000 bbl/d. 

Patrick Wenderler, head of bp’s German operations, said: “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.”

bp has faced a series of leadership changes in recent years, with Meg O’Neill set to become its third chief executive in less than five years. Last year’s “reset strategy” saw the company pledge major cost reductions and divestments, which included slashing investment in renewables and increasing focus on oil and gas.

Interim CEO Carol Howle said the Gelsenkirchen sale will strengthen the company’s balance sheet while “increasing the resilience of our focused refining portfolio”. 

The announcement follows bp’s latest results which showed a rise in end-use emissions and a pre-tax profit of US$7.7bn.