bp has completed the sale of its Gelsenkirchen refinery and related businesses in Germany to Klesch Group, marking another step in the company’s strategy to streamline its downstream portfolio and strengthen capital allocation.

The transaction is expected to reduce bp’s underlying operating expenditure by approximately US$1 billion while supporting its focus on disciplined investment and a more streamlined asset base. Based on historical performance, the sale is expected to be free cash flow accretive, with the associated assets and liabilities transferring to Klesch Group.

According to Richard Harding, bp’s interim executive vice president of Downstream, the divestment strengthens the company’s balance sheet and simplifies its portfolio, allowing bp to concentrate investment on assets and markets where it can remain most competitive while building a more resilient downstream business.

The Gelsenkirchen refinery plays a significant role in supplying fuels and petrochemicals to western Germany. Patrick Wendeler, bp’s head of country for Germany, said Klesch Group’s refining expertise and established presence in the German market position it well to lead the refinery into its next phase. He added that bp will continue serving customers in Germany through its remaining businesses, including the Aral retail network.

The sale follows bp’s conclusion that the refinery’s long-term development would be better supported under new ownership. As part of the transaction, employees at the refinery and its associated businesses have transferred to Klesch Group.

Following the divestment, bp’s refining portfolio comprises five refineries serving key markets across its downstream operations, including Cherry Point and Whiting in the United States, as well as Castellón, Lingen and Rotterdam in Europe.

For more information visit www.bp.com