BP has agreed to sell its German oil refinery in Gelsenkirchen to investment firm Klesch Group. This move forms part of the company’s $20bn cost-cutting plan.
The refinery processes about 12 million tonnes of crude oil each year. Most of this fuel supports cars and aircraft. BP said selling the site will reduce operating expenses by roughly $1bn. By selling Gelsenkirchen, BP has raised its cost-cutting target to $6.5bn–$7.5bn by 2027. The company has already divested more than $11bn of its $20bn target.
BP aims to simplify its operations after a leadership overhaul and a failed green energy push. The company struggled to compete with rivals such as Shell during the energy crisis triggered by Russia’s invasion of Ukraine in 2022. Additionally, BP plans to move its global headquarters fully back to London. The company will relocate to a 17,800 square metre office scheme at Timber Square on the South Bank by early 2028. This site sits just a mile from Shell’s European headquarters.
Meg O’Neill, formerly of Australia’s Woodside Energy, will become BP’s first external chief executive in April. She will also be the first woman to lead a major listed oil company. O’Neill replaces Albert Manifold, who recently took over as BP’s board chair.
BP expects to pay O’Neill at least £11.7m this year, covering share awards she would have received in her previous role. Her salary is more than double the £5.3m earned by former chief executive Murray Auchincloss. The Gelsenkirchen site employs roughly 1,800 people. Staff across the refinery, logistics, and sales divisions will transfer to Klesch Group once the sale concludes in the second half of 2026.
BP’s decision follows growing pressure from shareholders and activist investors to improve profits. It also responds to environmental groups calling for the company to reduce its climate impact.
The company stated that the divestment and headquarters move will help BP focus on efficiency, strengthen core operations, and cut costs. Analysts say the sale demonstrates a renewed focus on traditional oil and gas amid global energy uncertainty. BP cost-cutting continues to reshape the company, signaling a strategic pivot toward profitable assets. Observers expect more asset sales as BP strives to streamline its portfolio.
For more updates on this news, follow London Pulse News.
