BP sells Gelsenkirchen Refinery to BP as the overhaul continues

BP completed the sale of its Gelsenkirchen refining plant to Klesch Group. The oil major expects a?$1?billion reduction underlying 'operating expenses as it simplifies its operation.

The London-listed firm has implemented sweeping changes in the last year to improve profitability. It is pursuing a new strategy after an ill-fated venture into renewables. BP announced last week that they 'want to sell their North Sea assets.

The value of the 'Gelsenkirchen' deal was not disclosed. However, BP stated that the transaction increases?free?cashflow and transfers assets and liabilities relating to Klesch.

The sale was part of BP's 20 billion dollar divestment program to reduce debt and boost returns. It allowed BP the opportunity to increase the structural cost reduction targets for the company to between $6.5 and $7.5 billion in 2027.

The refinery uses about 12 million metric tonnes of crude oil each year.

Barclays analyst Lydia Rainforth estimated that the sale 'would help BP remove $1.3 to $1.7 'billion in liabilities 'from its books.

Richard Harding, BP's interim executive Vice President of downstream, stated that the deal allows the company to focus capital where it is most competitive. BP's portfolio of refineries now includes five?refineries - Cherry Point and Whiting in the U.S., and Castellon, Lingen, and Rotterdam (in Europe).

(source: Reuters)