REG - BP PLC - bp to sell Gelsenkirchen refinery to Klesch Group

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RNS Number : 2962X  BP PLC  19 March 2026

 

bp further simplifies portfolio with agreement to sell Gelsenkirchen refinery
to Klesch Group

·      Transaction accelerates delivery of bp's strategy to simplify its
portfolio and focus the downstream on its leading integrated businesses.

·      Increases bp's structural cost reduction target by around $1
billion to $6.5 to $7.5 billion by 2027.

·      Deal strengthens bp's balance sheet and creates a more resilient
refining portfolio.

 

Bochum/London, 19 March 2026 - bp today reached an agreement to sell its
Gelsenkirchen refinery and related businesses to Klesch Group, an independent
European refiner. The transaction represents another significant milestone in
bp's acceleration of its strategy, including simplifying the portfolio,
strengthening the balance sheet and focusing the downstream on its leading
integrated businesses.

bp is now targeting $6.5 to $7.5 billion of structural cost reductions by
2027, reflecting the expected savings of around $1 billion of underlying
operating expenditure associated with Gelsenkirchen. The 2027 cost reduction
target now equates to around 30 percent of bp's 2023 cost baseline. This marks
the second time bp has increased its target, having outlined $4 to $5 billion
of savings in February 2025, and increased this in February 2026 to $5.5 to
$6.5 billion reflecting the outcome of the strategic review of Castrol.

The transaction strengthens bp's balance sheet, is free cash flow accretive
based on historical performance and contributes to lowering bp's cash
breakeven for its retained refining portfolio. In addition to the transfer of
liabilities, transaction terms and associated proceeds are subject to
customary closing adjustments, including for the value of inventory at time of
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 primarily manufactures fuels for vehicles and
aircraft, processing roughly 12 million tonnes of crude oil per year. The
refinery also supplies essential feedstocks to the petrochemical industry in
Germany and across Europe.

The deal includes Gelsenkirchen refinery and Bottrop tank farm; DHC Solvent
Chemie GmbH (a subsidiary); interests in logistics joint ventures; and
marketing businesses related to petrochemicals and unbranded B2B fuels
produced at the Gelsenkirchen refinery. To maintain bp's regional supply
requirements, bp has agreed offtake arrangements covering ground fuels,
aviation fuel and coke.

The experienced workforce, as well as those supporting logistics and sales
infrastructure, are expected to join the new owner's workforce upon completion
of the deal. Today, the integrated refinery complex employs around 1,800
people.

Subject to conditions including regulatory and governmental approvals, the
transaction is expected to close in the second half of 2026.

-END-

Notes to editors

About the intended sale of Gelsenkirchen refinery operated by Ruhr Oel GmbH
(ROG):

·   bp Gelsenkirchen (ROG) operates two sites in Horst and Scholven,
consisting of an integrated refining and petrochemical hub as well as the
Bottrop tank farm.

·   The refinery processes approximately 12 million tonnes of crude oil
per year and has 265,000 barrels crude distillation capacity per day,
producing petrol, diesel, jet fuel, heating oil and more than 50 other
products, primarily for the chemical industry.

·      Underlying operating expenditure associated with Gelsenkirchen in
2025 is around $1 billion.

·   As published at bp's 4Q25 results on 10 February 2026, reflecting the
Castrol divestment, bp's structural cost reduction target was increased by
around $1.5 billion to $5.5 to 6.5 billion by 2027 against a 2023 baseline,
and did not include any potential additional cost savings from the intended
sale of Gelsenkirchen refinery.

·   Intended sale removes liabilities from bp associated with the
divestment of Gelsenkirchen including pension obligations, provisions, and
other short-term liabilities.

·   Starting from bp's 1Q26 results, the assets and liabilities relating
to the Gelsenkirchen refinery (excluding working capital) will be reclassified
to Assets Held for Sale and Liabilities directly associated with assets held
for sale.  Associated reported cash capex and depreciation and amortisation
will cease as of the reclassification.

·    As published at bp's 4Q25 results, in 2025 bp has announced or
completed over $11 billion of its 2027 $20 billion divestment program.
Progress updates are provided at upcoming quarterly results.

·     bp is targeting to lower its refining cash breakeven by around $3
per barrel by 2027 versus 2024 on a like-for-like portfolio basis.

·      The terms of this deal are confidential.

About Klesch Group:

·     Klesch is a leading independent refiner focused on delivering
operational excellence. Established in 1990 by Founder and Chairman A. Gary
Klesch, the organisation employs approximately 1,000 people.

·     The company's asset portfolio includes the Heide Refinery in
Germany, acquired from Shell in 2010, and the Kalundborg Refinery in Denmark,
acquired from Equinor in 2022.

·    Klesch plays a strategically important role in supporting the
security of critical fuel supply and transportation energy needs across
Germany and Denmark.

·  The company operates to the highest standards of safety, environmental
stewardship, and regulatory compliance within some of Europe's most highly
regulated jurisdictions.

·  The Klesch business is focused exclusively on refining. The refineries
under its ownership consistently showcase safety, operational excellence, and
efficiency through disciplined investment and continuous operational
optimisation.

Cautionary statement

In order to utilize the 'safe harbor' provisions of the United States Private
Securities Litigation Reform Act of 1995 (the 'PSLRA'), bp is providing the
following cautionary statement. This press release contains certain forecasts,
projections and other forward-looking statements - that is, statements related
to future, not past, events and circumstances which may relate to one or more
of the financial condition, results of operations and businesses of bp and
certain of the plans and objectives of bp with respect to these items. These
statements are generally, but not always, identified by the use of words such
as 'will', 'expects', 'is expected to', 'aims', 'should', 'may', 'objective',
'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we see' or
similar expressions. In particular, the following, among other statements, are
all forward-looking in nature: expectations in relation to the timing and
completion of the transaction described including the outcome of regulatory
and governmental approvals, expectations in relation to underlying operating
expenditure savings associated with Gelsenkirchen and the outcome of the
strategic review of Castrol, and timing and expectations in relation to bp's
structural cost reduction primary target.

By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will or may
occur in the future and are outside the control of bp. Actual results may
differ from those expressed in such statements, depending on a variety of
factors including the risk factors set forth in our most recent Annual Report
and Form 20-F under 'Risk factors'. Our most recent Annual Report and Form
20-F is available on our website at www.bp.com, or can be obtained from the
SEC by calling 1-800-SEC-0330 or on its website at www.sec.gov.

 

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