LONDON, March 19, 2026, 13:15 GMT
BP shares gained Thursday, climbing 2.4% to roughly 569 pence by midday in London. The oil major has struck a deal to offload its Gelsenkirchen refinery in Germany to Klesch Group and has also raised its cost-cutting target for 2027.
Timing’s key here. BP’s shares are picking up a boost unique to the company, just as crude spikes—Brent shot past $119 a barrel, then cooled off to $113.40 by 1237 GMT. London’s oil and gas sector smashed a record high, though the FTSE 100 still slipped 1.9% amid wider market jitters.
BP bumped its 2027 cost-cutting target to a range of $6.5 billion to $7.5 billion, up from the $5.5 billion-$6.5 billion band it outlined back in February. The company expects to strip out roughly $1 billion in yearly operating costs tied to Gelsenkirchen, and says the sale should pad free cash flow — that’s cash on hand after capital spending — while dropping the breakeven oil price for its other refineries. “Strengthen our balance sheet,” is how interim CEO Carol Howle put it. About 1,800 employees are set to transfer over to Klesch, with the site handling around 12 million metric tons of crude each year. Investegate
BP kept quiet on both the deal’s price tag and the exact liabilities exiting its balance sheet. Barclays’ Lydia Rainforth put the likely liability relief somewhere between $1.3 billion and $1.7 billion.
BP’s push to reach its $20 billion asset-sales goal gets a further boost, as disclosed sales and deals now top $11 billion. That means Meg O’Neill, the incoming CEO, will inherit a more streamlined asset base when she steps in.
BP’s last expectations reset landed with a thud. Back in February, the company paused $750 million in quarterly buybacks, aiming to cut debt faster, and said net debt was down to $22 billion. Management stuck to a $14 billion-$18 billion debt target for 2027. The stock dropped 7% on the news—Shell and Exxon, for their part, left their own buyback programs untouched.
That risk hasn’t gone away. Earlier this month, James West, head of energy and power research at Melius Research, pointed out the market’s leaning: traders expect a “swift end” to the disruptions in the Strait of Hormuz, with oil prices easing if that happens. But Standard Chartered pushed back, warning the fallout could linger—a “long tail” for prices remains possible, even if the fighting subsides. Reuters
BP’s winning points right now: trimmed costs, a leaner refining arm, and a tighter grip on cash generation—helped, for the moment, by strong crude. The bigger question lurks ahead: will the goodwill hold when oil prices settle down and BP pivots from selling assets to cutting debt and, if all goes to plan, reviving buybacks?
