When you fall on hard times, you sometimes have to downsize. So it is with BP, which is in talks to sell its London headquarters because of massive financial losses. Multinational oil companies: They’re just like us.
The company’s office is located in what the Wall Street Journal calls the “tony Mayfair section” of London and the sale is being finalized for roughly $328 million. That’ll be a nice windfall for the company that saw record multibillion-dollar losses to start the year. It’s also nearly quadruple the amount of money BP earned last quarter after oil recovered somewhat.
Hong Kong-based investment company Lifestyle International Holdings is the reported buyer for the space that includes a beautiful glass-topped atrium and sweeping staircases curving out over it. It’s pretty sweet, so congrats to Lifestyle International Holdings on its good taste.
The fact that BP is selling office reflects the way the pandemic is affecting us all and the specific dire straits of oil companies. Working in offices is simply not something most companies will be doing for a long time. BP has reportedly been looking to sell its office for months, and honestly hanging onto a $328 million space to house computers, files, pens, and whatnot seems silly. Now, it seems BP CEO Bernard Looney could simply buy a few storage lockers, stash stuff there, and call it a day until people can safely go back to work.
The nearly closed sale, first reported by the Financial Times, also reflects how oil companies are particularly poorly positioned going forward. BP bought the office in 2001, shortly after it closed on the largest industrial merger in history when it bought American oil major Amoco in 1998 for $48.2 billion. But the good times have slowly been winding down over the past decade, and they came to a screeching halt this year as the pandemic cratered oil demand.
Oil companies have been scrambling to figure out how to deal ever since. The choices to date have involved defaulting on loans, fretting about a green recovery, laying off workers while paying out shareholders, and making bad tweets. Honestly, selling a tricked-out corporate office seems like a good way to buy some breathing room and not lay off workers…except that BP is doing that, too. Looney announced in June that he expects to lay off 10,000 mostly office workers,“most by the end of this year.”
That’s a lot of empty desks, so it makes sense that BP would downsize its office space. It’s nevertheless surprising its corporate headquarters is among the first to go. But in a sign of how things work, the Wall Street Journal reports the company also has plans to lease back at least some of the office “where Chief Executive Bernard Looney and the rest of the BP leadership team is based.” No word on what will happen to workers elsewhere if the firm decides to sell off other real estate the CEO doesn’t use.