BP to reduce German refinery's oil processing capacity -executive
Reuters
Published Mar 20, 2024 15:05
Updated Mar 20, 2024 15:36
By Ron Bousso
HOUSTON (Reuters) -BP plans to reduce the crude processing capacity of its Gelsenkirchen oil refinery in Germany by around one third from 2025 due to a weaker demand outlook, its head of refining Amber Russell said on Wednesday.
The capacity reduction comes as the European refiners face increasing pressure from stringent environmental regulations, growing overseas competition and a rise in electric vehicle sales.
"In Germany, for the projections for the supply-demand balance, we've seen demand coming down pretty significantly," Russell told Reuters on the sidelines of the CERAWeek energy conference.
The Gelsenkirchen refinery which was built in 1935 is highly complex and includes two plants and a petrochemicals site, she said.
"But it's also structurally very high cost and so what we're looking at is trying to reduce our crude throughput and to simplify the site and make it more efficient."
BP (LON:BP) will reduce by around one third the capacity of the refinery in western Germany which currently has a crude oil processing capacity of 265,000 barrels per day, she said.
A BP spokesperson said the reduction will take place from 2025, when the refinery also will increase biofuels processing.
BP took a $1.34 billion impairment over the Gelsenkirchen refinery in 2023 due to "changes in economic assumptions," it said in its annual report published earlier this month.
In January, Shell (LON:RDSa) announced it will shut down its oil refinery in Wesseling, Germany by 2025 and convert the site to produce lubricant feedstock as part of its drive to reduce its carbon emissions.
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Written By: Reuters
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