BP's German Refinery Sale Faces Regulatory Hurdle as Analyst Sentiment Strengthens

BP's sale of its Gelsenkirchen refinery faces German regulatory scrutiny, while major banks raise price targets on the oil major's strategic overhaul and cost-cutting plans.

A formal review by the German government has emerged as a potential delay to BP's planned sale of its Gelsenkirchen refinery to the Klesch Group. The unexpected regulatory scrutiny comes even as major Wall Street banks express growing confidence in the oil major's strategic overhaul under new leadership.

In a coordinated move on April 8, analysts from JPMorgan, Berenberg, and Citi all raised their price targets for BP's London-listed shares. JPMorgan lifted its target to 600 pence from 520 pence, Berenberg increased its to 700 pence from 520 pence, and Citi moved its target to 680 pence from 540 pence. This bullish stance persists despite the stock recently facing pressure, having fallen over eight percent amid geopolitical tensions and intense sector competition.

The German Ministry for Economic Affairs is examining the transaction, invoking rules that allow the government to block acquisitions of critical infrastructure by non-EU investors on national security grounds. The ministry has not commented on specifics, citing business confidentiality. The Gelsenkirchen site, which processes approximately 12 million tonnes of crude oil annually and employs 1,800 people, is a significant piece of European energy infrastructure. The deal, a cornerstone of BP's portfolio simplification, was originally slated for completion in the second half of 2026.

This divestment is a key part of a broader efficiency drive. Management aims for structural cost savings of $6.5 to $7.5 billion by 2027, representing about 30 percent of the 2023 cost base. The sale is also expected to lower the cash breakeven point for BP's refining segment by roughly three dollars per barrel.

The company's operational sensitivity was highlighted, with each one-dollar rise in the Brent crude price boosting BP's pre-tax profit by around $340 million. Brent recently recovered to trade near $98 a barrel, helping BP's shares gain around two percent in London trading.

Internally, shareholder pressure is mounting ahead of the Annual General Meeting on April 23 in Sunbury-on-Thames. The Local Authority Pension Fund Forum (LAPFF), representing several UK pension funds, alongside asset manager Legal & General, plans to support a resolution calling for greater transparency on how BP's increased investments in oil and gas production will create long-term shareholder value. This is a direct response to the company's pivot from its earlier renewable energy strategy.

Leadership changes are also underway. Carol Howle was appointed deputy chair and will assume responsibility for portfolio review and strategy development from April 2026. The AGM will serve as an early test for the new leadership team under CEO Meg O'Neill, who took the helm on April 1, marking the first external appointment to the top job in over a century.

Investors will get a fresh look at the numbers when BP reports first-quarter results on April 28, 2026. Analysts forecast a revenue jump of over 20 percent to nearly $58 billion, with earnings per share expected at $0.71. The presentation will be scrutinized for early signs of how the strategic measures are impacting profitability.