bp completed the sale of its Gelsenkirchen refinery in Germany and related businesses to Klesch Group, the company said on Monday, as it continues to streamline its downstream portfolio and strengthen its balance sheet.
The transaction supports bp's disciplined capital allocation strategy and is expected to reduce underlying operating expenditure by around $1 billion.
"This deal strengthens our balance sheet and simplifies our portfolio," Richard Harding, bp's interim executive vice president for downstream, said in the statement.
"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," he added.
The sale is free cash flow accretive based on historical performance and transfers the refinery's assets and associated liabilities, including pension obligations, provisions and other short-term liabilities, to Klesch Group.
Patrick Wendeler, bp's country head for Germany, said the refinery plays an important role in supplying western Germany with fuels and petrochemicals.
bp announced its intention to sell the refinery and related assets to Klesch on March 19 after concluding that a new owner would be better positioned to support the site's long-term future. Employees at the refinery and associated businesses transferred to Klesch as part of the transaction.
The sale includes the Horst and Scholven refinery sites, which together form an integrated refining and petrochemical hub, as well as the Bottrop tank farm.
The refinery processes around 12 million metric tons of crude oil annually and has crude distillation capacity of 265,000 barrels per day, producing gasoline, diesel, jet fuel, heating oil and more than 50 products, primarily for the chemical industry.
Following the divestment, bp retains a refining portfolio of five refineries serving key markets, including Cherry Point and Whiting in the US, and Castellon, Lingen and Rotterdam in Europe.
By Duygu Alhan
Anadolu Agency
energy@aa.com.t
