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.