BP Completes Sale Of Gelsenkirchen Refinery To Klesch Group

BP has completed the sale of its Gelsenkirchen refinery and related businesses to Klesch Group, the company said.

The British oil major said the sale is in line with its focus on disciplined capital allocation and is expected to reduce underlying operating expenditure by about $1 billion.

“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,” Richard Harding, BP’s interim executive vice president for downstream, said.

Based on historical performance, the transaction is expected to be accretive to free cash flow and transfers the associated assets and liabilities to Klesch Group.

“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,” Patrick Wendeler, BP’s head of country for Germany, said.

BP said the sale follows its conclusion that a new owner would be better placed to develop the refinery and support its long-term future. Employees at the refinery and the associated businesses have transferred to Klesch Group as part of the transaction.

Following the sale, BP retains a refining portfolio of five refineries serving key customers and markets across its downstream business: Cherry Point and Whiting in the United States, and Castellón, Lingen and Rotterdam in Europe.