LONDON— BP PLC is in talks to sell its London headquarters to help cover debt, punctuating the crisis facing the British oil giant and its peers as they navigate a pandemic that has decimated demand for oil.
BP bought the office block in the tony Mayfair section of London almost two decades ago, a time when it and its rivals enjoyed the prospect of growing oil demand and unrivaled stock-market valuations. Then-CEO John Browne had just pulled off the largest oil deal in history at the time, a move that triggered a series of other, big oil deals that created today’s handful of supermajors—giant, integrated oil companies that pumped crude, refined it into gasoline and sold it at filling stations around the world.
Today, the outlook for those companies is dramatically changed. The new coronavirus pandemic has destroyed demand for crude amid economic lockdowns and other restrictions. Forecasters say it may take years to return to pre-Covid oil demand levels, if ever. BP itself, in one long-term oil-market scenario it laid out earlier this year, forecast demand may never again hit 2019 levels.
That has triggered a year of heavy losses among the West’s oil giants: Exxon Mobil Corp. , Chevron Corp. , Royal Dutch Shell PLC, BP and France’s Total SE . Shell and BP have cut dividends to preserve cash, while BP said it would seek to sell assets to help pare its especially high debt load.
Shares have fallen sharply, destroying market value. Earlier this year, Exxon, for years America’s most valuable company by market capitalization, lost its place in the prestigious Dow Jones Industrial Average blue-chip stock index.
