BP has completed the sale of its refinery in Gelsenkirchen, Germany, to Klesch Group, as the UK supermajor accelerates efforts to streamline its business and high-grade its portfolio under CEO Meg O'Neill. The transaction value was not disclosed.

The Gelsenkirchen complex, located in Germany's industrial Ruhr region, was one of BP's largest European refining assets. Its divestment marks a significant step in BP's retreat from European refining, where operators have faced persistent pressure from high energy costs, regulatory burdens tied to the continent's energy transition, and competition from larger, more modern complexes in the Middle East and Asia.

According to BP, the divestment is part of its continued focus on disciplined capital allocation and is expected to reduce the group's underlying operating expenditure by approximately $1 billion.

"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 restructured its operations into two primary divisions—Upstream and Downstream—with trading connecting both segments to generate additional value. The overhaul comes as BP trails US rivals ExxonMobil and Chevron in market valuation and shareholder returns, intensifying investor pressure on management to demonstrate a credible path to closing the gap.

Following the sale of the Gelsenkirchen refinery, BP retains a refining portfolio of five facilities serving key customers and markets across its downstream business. These include Cherry Point and Whiting in the United States, along with Castellón, Lingen, and Rotterdam in Europe.

The completion of the Gelsenkirchen transaction comes just days after BP formally launched a process to market its North Sea business, part of the ongoing company-wide overhaul aimed at simplifying the portfolio and directing investment toward high-return projects. The formal launch followed months of speculation that BP would divest part or all of its UK North Sea operations to concentrate on reserve growth and long-term production opportunities outside the UK.

Last month, CEO O'Neill stated that BP had begun simplifying its portfolio and cutting costs, committing to "fewer but better choices" in selecting projects for investment.

"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 wrote in a LinkedIn post reflecting on her first 100 days as BP's chief executive. O'Neill is the first woman to lead a Big Oil company.

BP announced the completion of the sale in an official press release.

By Tsvetana Paraskova for Oilprice.com