BP Sells Gelsenkirchen Refinery in $20bn Cost-Cutting Plan

BP has agreed to sell its Gelsenkirchen refinery site in Germany to the investment firm Klesch Group as part of a significant $20 billion cost-cutting plan. The valuation of the sale has not been disclosed.

This move is expected to save BP approximately $1 billion in underlying operational expenditures. The refinery has a processing capacity of 12 million tons of crude oil annually, primarily for fuel for cars and aircraft.

This divestment is part of BP's broader strategy to raise its cost-cutting target to between $6.5 billion and $7.5 billion by 2027, which represents almost a third of its cost baseline for 2023. BP's third chief executive in five years, Meg O'Neill, will take over in April and is anticipated to face pressure from disgruntled shareholders, including the New York activist hedge fund Elliott Management, to improve the company's fortunes and renew calls from green groups to end contributions to the climate crisis.