BP has completed the sale of its refinery in Gelsenkirchen, Germany, to Klesch Group, as the UK supermajor continues to streamline its business and high-grade its portfolio under CEO Meg O’Neill.
The transaction, whose sum was not disclosed, is part of BP’s continued focus on disciplined capital allocation and is also expected to lower the group’s underlying operating expenditure by around $1 billion, the supermajor said on Monday.
“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,” said Richard Harding, interim executive vice president of Downstream at BP.
Earlier this year, BP streamlined its businesses, bundling these into two divisions, Upstream and Downstream, with trading connecting both to create value.
After the sale of the Gelsenkirchen refinery, 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.
The completion of the transaction for the Gelsenkirchen refinery comes days after BP formally launched a process to market its North Sea business amid the ongoing company overhaul to simplify the portfolio and invest in high-return projects.
The formal launch of a potential sale of the North Sea business came after months of speculation that BP would be divesting part or all of its operations in the UK North Sea to focus on reserve growth and long-term production opportunities outside the UK.
Last month, CEO O’Neill said that BP had started to simplify its portfolio and cut costs, and would make fewer but better choices in which projects to invest.
“We are taking concrete action to grow long-term value for shareholders: simplifying our portfolio, reducing costs, maintaining tight discipline on capex and strengthening the balance sheet,” O’Neill, the first female CEO of a Big Oil company, wrote in a LinkedIn post to reflect on the first 100 days as top executive of BP.
By Tsvetana Paraskova for Oilprice.com
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