BP plc (NYSE: BP) reached an agreement to sell its Gelsenkirchen refinery and related businesses to Klesch Group, an independent European refiner. The transaction is expected to close in the second half of 2026, subject to regulatory and governmental approvals.

The sale includes the Gelsenkirchen refinery, Bottrop tank farm, DHC Solvent Chemie GmbH subsidiary, interests in logistics joint ventures, and marketing businesses related to petrochemicals and unbranded business-to-business fuels produced at the facility. The Gelsenkirchen refinery processes approximately 12 million tonnes of crude oil annually and manufactures fuels for vehicles and aircraft while supplying feedstocks to the petrochemical industry.

BP increased its structural cost reduction target to $6.5 billion to $7.5 billion by 2027, reflecting expected savings of around $1 billion in underlying operating expenditure associated with Gelsenkirchen. This represents approximately 30 percent of BP's 2023 cost baseline and marks the second increase from the original $4 billion to $5 billion target outlined in February 2025.

"With this transaction, we are strengthening our balance sheet, increasing our structural cost reduction target, and increasing the resilience of our focused refining portfolio," said Carol Howle, interim CEO at BP.

The integrated refinery complex employs around 1,800 people, with the workforce expected to join Klesch Group upon completion. BP has agreed to offtake arrangements covering ground fuels, aviation fuel and coke to maintain regional supply requirements.

Transaction terms and proceeds remain subject to customary closing adjustments, including inventory valuation at completion time, according to the company's statement.