BP to sell refinery/petchem complex in Germany; looks at cutting costs

UK oil giant BP plans to sell its BP Gelsenkirchen refining site and associated assets in Germany, as CEO Murray Auchincloss pushes on with plans to cut costs by at least US$2 billion.

BP Europa SE plans to sell the site, formally named Ruhr Oel GmbH (ROG) – BP Gelsenkirchen, along with related assets including DHC Solvent Chemie GmbH, a specialised solvent products manufacturer. The assets include 12 million tonnes/year oil refinery and two naphtha crackers with ethylene capacity of 1 million tonnes/year.

· It says the marketing process will begin immediately with sales agreements targeted for 2025. Assuming successful, timing for the completion of the sale and transfer of the company to a new owner is subject to regulatory and governmental approvals.

“BP needs to continually manage its global portfolio as we position to grow as a simpler, more focused, higher-value company,” Emma Delaney, BP’s EVP of customers and products unit, said in a statement.

In recent years, BP says it has implemented numerous projects to modernise the infrastructure of the refinery in Gelsenkirchen. This includes, for example, renewing the power grid and establishing an independent steam supply. With initiatives like these, the site can meet the demands of modern refinery operations. The continued transformation of the site, initiated in 2024, aims to reduce the refinery’s complexity and processing capacity. Today, the refinery can process crude oils from around the world, produce high-quality fuels and also has the potential to manufacture biofuels and process recycled plastics.

BP had previously announced plans to reduce crude processing capacity at the Gelsenkirchen refinery from this year by around one-third due to a weaker demand outlook.

The refinery, built in 1935, includes two plants and a petrochemical site, and has a processing capacity of around 12 million tons of crude oil per year.

Auchincloss said last year said he would cut the British company’s costs by at least US$2 billion by the end of 2026 to boost returns and address investor concerns over its energy transition strategy.

Other global refiners in January offered little optimism in a near-term improvement in profit after a downturn in margins on producing fuel.

BP took a US$1.34 billion impairment on the Gelsenkirchen refinery in 2023 due to “changes in economic assumptions”.

Ruhr Oel GmbH – BP Gelsenkirchen (ROG) operates the two plants in Horst and Scholven in Gelsenkirchen as an integrated refining and petrochemical site, as well as the Bottrop tank farm. The refinery has a processing capacity of around 12 million tonnes of crude oil/year. This is used to produce petrol, diesel, jet fuel and heating oil, as well as more than 50 other products, primarily for the chemical industry. In addition to its major importance for the domestic fuel and energy supply, the Gelsenkirchen site also plays a key role in the North Rhine-Westphalia chemical industry.

In addition, ROG is the sole owner of DHC Solvent Chemie GmbH and has a share in the Maatschap Europort Terminal (MET) in the Netherlands. It also holds shares in the N.V. Rotterdam-Rijn-Pijplining (RRP) crude oil and product pipeline and Nord-West Oelleitung GmbH (NWO) with its pipelines, crude oil tanks, tank farms and unloading points.