(Reuters) -BP plans to sell its BP Gelsenkirchen refining site in Germany, it announced on Thursday, as CEO Murray Auchincloss pushes on with plans to cut costs by at least $2 billion.
“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.
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.
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 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 $2 billion by the end of 2026 to boost returns and address investor concerns over its energy transition strategy.
BP shares were up 2.5% in afternoon trading.
Other global refiners in January offered little optimism in a near-term improvement in profit after a downturn in margins on producing fuel.
ROG fully owns DHC Solvent Chemie and holds stakes in the Maatschap Europoort Terminal and a crude oil and products pipeline in the Netherlands.
BP aims to finalise sales agreements by 2025 and will maintain normal operations at the refinery in the meantime.
BP took a $1.34 billion impairment on the Gelsenkirchen refinery in 2023 due to “changes in economic assumptions”.
(Reporting by Yamini Kalia, Yadarisa Shabong and Arunima Kumar in Bengaluru; editing by Vijay Kishore, David Evans and Jason Neely)
