bp plc (London, England) has completed the sale of its Gelsenkirchen refinery and related businesses to Klesch Group (London, England). The transaction supports bp’s continued focus on disciplined capital allocation and is also expected to lower underlying operating expenditure by around $1 billion.
Richard Harding, interim executive vice president of Downstream at bp (London, England), said: “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.”
Based on historical performance, the transaction is free cash flow accretive and transfers the associated assets and liabilities to Klesch Group (London, England).
Patrick Wendeler, head of country for Germany at bp, added: “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.”
The sale follows bp’s conclusion that a new owner would be better placed to take the refinery forward to support its long-term future. Employees at the refinery and in the associated businesses have transferred to Klesch Group as part of the transaction.
bp retains a refining portfolio of five refineries serving key customers and markets across its downstream business, including Cherry Point and Whiting in the United States, and Castellón, Lingen, and Rotterdam in Europe.