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BP sells its London head office as it shifts to low-carbon energy

Suban Abdulla
·2-min read
British gas and oil multinational company BP (British Petroleum) logo is seen on October 7, 2020 in Warsaw, Poland. (Photo by Aleksander Kalka/NurPhoto via Getty Images)
BP has agreed to lease its 1 St James’s Square property in central London back from Lifestyle International for two years. Photo: Aleksander Kalka/NurPhoto via Getty Images

BP (BP.L) has announced the sale of its London head office to Hong Kong investment firm Lifestyle International (1212.HK) for £250m ($332m).

The British oil giant also agreed to lease its 1 St James’s Square property in central London back from Lifestyle International for two years, saying the deal would give it the opportunity “to reimagine how and where a reinvented BP should be headquartered.”

BP moved into the premises in 2002 after acquiring it from Ericsson (ERIC) for a reported £110m.

It is the latest string of disposals for BP, which is aiming to sell $25bn of assets by 2025 amid a restructuring that pushes the business into low-carbon energy.

The company, led by chief executive Bernard Looney, has already divested or agreed a deal on half of its target, as it seeks to reduce its debt.

READ MORE: BP looks to net-zero goal with new green hydrogen project

In August, it was reported that BP was hunting for a buyer for its London office, as the pandemic changed work patterns.

At the time the property was expected to fetch up to £300m. The sale announcement is £50m short of the predicted value.

Earlier this year, Looney said that the FTSE 100 (^FTSE) company will move to a more “hybrid work style”, balancing home and office working.

BP employs 6,500 staff across its offices in London and in Sunbury-on-Thames in Surrey.

Last week, the oil giant announced it was teaming up with Danish wind power group Orsted (ORSTED.CO) on a green hydrogen project in Germany.

The project is planning to build a renewable energy plant, including a 50 megawatt (MW) electrolyser, at the Lingen refinery, harnessing power from the North Sea to split water into hydrogen and oxygen.

The move would replace 20% of natural gas-based hydrogen at the plant.

Watch: BP's green hydrogen project takes off