The Shale Daily Update – 9.1.2020: BP Selling London Headquarters

Paul Takahashi reports in the Houston Chronicle that 18 upstream oil and gas companies filed for bankruptcy protection during the second quarter of this year.

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This is likely to become a trend, and not just in the oil and gas business. UK Major BP announced over the weekend that it plans to sell its London headquarters complex as it adapts to having a large portion of its workforce working from home in the wake of the COVID-19 pandemic. As reported by Bloomberg, the company, which employs 6,500 workers in London, plans to sell its building in St. James Square and then rent it back from the new owner for as long as two years before leaving for good.

The Times of London, as cited by Bloomberg, reported that just 13% of London office workers had returned to the office as the pandemic dies down, with the number in the major urban centers across the country a little higher at just 17%. This is also what we are seeing in the major cities across the United States and in other parts of the world, as companies forced to allow employees to work from home during the depths of the pandemic come to the realization that a large percentage of them can be just as productive when working from home.

This would not have been the case as recently as 10 years ago, when videoconferencing technology was still basically a glitch-ridden crapshoot, but the advent of ZOOM and other similar technologies have made the holding of large video calls virtually seamless, eliminating in large part the need to have all employees congregated together in a single building or office complex. Companies like BP and many others I’ve talked with over the past several months are coming to realize the massive potential cost-savings involved in having many employees perform their duties remotely.

The downside of all of this, of course, is that it spells doom for the commercial real estate business all over the world, as well as for ancillary businesses that spring up in big downtown areas. The economic shaking out to come from all of this will be enormous.

Meanwhile, on other news…

Joe Biden went to Pittsburgh on Monday to give a speech and in the process lied again about his true intentions related to banning fracking. While Biden firmly stated that he is not in favor of a fracking ban, the reality is that he has promised to do exactly that on multiple occasions during the campaign, as has his running mate, Kamala Harris. Those promises are all on video, and will be used in Trump ads like this one:

This is neither complicated nor ambiguous.

S&P Global Platts reports that Gulf of Mexico operators still had almost 1 million barrels of oil of daily production shut-in as of mid-day Monday, as recovery from the passage of Hurricane Laura proceeds.

In an important development for crude oil exports, the Port of Corpus Christi has reached an agreement with the town of Port Aransas to settle their lingering dispute over the potential use of Harbor Island to house an export facility able to handle VLCCs, the largest class of oil tanker. According to the Corpus Christi Caller Times, the port and the city now have “a workable framework” in place to address development on Harbor Island. That would include oversight on city ordinance and permitting issues, and funding provisions to address fire protection and emergency services.

“The agreement also ends all of the litigation between the City and the Port,” Port Aransas Mayor Charles Bujan said. “Hopefully, this agreement can serve as a springboard for continued discussions with the Port on Harbor Island and on other matters of mutual concern between the Port and the City.

This is no surprise: The radical leftists in the anti-fossil fuel lobby are pressuring the Biden campaign to ban any representatives from the nation’s crucial fossil fuel industries from advisory roles. What a bunch of pathetic clowns.

Kinder Morgan can move ahead with construction of its key Permian Highway natural gas pipeline, per a ruling from a federal judge hearing a lawsuit raised by the Sierra Club. As reported by Kallanish Energy, U.S. District Judge Robert Pitman in Austin, Texas, denied a request by the Sierra Club for a preliminary injunction, saying the eco-group failed to show that continued construction would cause irreparable harm to landowners or endangered species.

A big loss for LOGA. The Louisiana Oil & Gas Association announced on Monday that is President, Gifford Briggs, will be leaving the group in the coming weeks to take over as API’s Gulf Coast Region Director. I’ve known Gifford for years, and have witnessed first-hand the outstanding work he has done for the Louisiana industry in his role at LOGA. So, this is a difficult loss for LOGA’s membership, as leading these trade associations is a difficult task that requires a special skillset. But the good news is that Mr. Briggs will still be on the job for the industry in his new role.

That’s all for today.