OMV CEO Roiss To Go In Mid-2015 In Management Revamp
VIENNA, Oct 14 (Reuters) - OMV Chief Executive Gerhard Roiss will leave the Austrian energy group as of mid-2015 - nearly two years ahead of schedule - as part of a management shakeup which will also see OMV's gas business subsumed into a new division, OMV said.
Sources close to the company, which under Roiss focused on exploration projects in increasingly expensive markets, had told Reuters of infighting between Roiss and the head of OMV's gas division about the future of this segment.
Media commentary had been piling pressure on Roiss and the supervisory board to revamp the management of OMV, Austria's biggest company, which has seen its underlying operating profit shrink this year.
Employee representatives, who make up a third of OMV's supervisory board, have said the internal discord paralysed OMV and had urged major shareholders to step in.
Austrian state holding company OIAG owns a 31.5 percent stake in OMV, and Abu Dhabi's International Petroleum Investment Co (IPIC) owns nearly 25 percent.
OMV's supervisory board has started to identify candidates to replace Roiss, the company said in a statement released around 11 hours after the board started meeting on Tuesday.
The supervisory board and Roiss, who became CEO in 2011, had agreed he would resign, OMV said, but gave no reason.
OMV's gas business will become part of OMV's refining and marketing division. The new downstream segment will be headed by refining head Manfred Leitner as of the start of 2015.
Talks on the contract of gas division head Hans-Peter Floren will start, OMV said, without giving details. Floren's contract had been extended this year until early 2017.
"OMV is in an exceptionally challenging situation at present. The environment in the core markets is fundamentally different to ... when the strategy was set up in 2011," Chairman Rudolf Kemler said in a statement.
"When further developing the corporate strategy, special focus shall be placed on increasing profitability and an optimised risk profile," Kemler said, adding that this should ensure attractive dividends in future.
An OMV spokesman said that the details of Roiss's early exit, including any potential financial settlement, had not been fixed yet. Roiss made about 1.9 million euros ($2.4 million) in 2013, according to OMV's annual report. Roiss's contract was extended until March 2017 last year.
Ailing Gas Business
OMV's underlying operating profit halved in the second quarter as the crisis in Libya forced OMV to raise production in higher-cost countries such as Norway.
Its gas segment, pressured like other European gas firms by low demand and high prices, has not flourished as much as hoped under the 2011 strategy, and the sources said Roiss's plans to shrink the division led to friction with Floren.
In 2013 the gas and power division contributed only 1 million euros to OMV's overall earnings before interest and tax (EBIT) of 2.7 billion euros.
OMV is a big customer and strategic partner of Russia's state-controlled Gazprom, with a large part of Russian gas exports to western Europe passing through OMV's Baumgarten hub near Vienna.
OMV's shares fell to a more than two-year low on Friday, having shed almost a third of their value since the beginning of the year. Analysts have said the market could see an early Roiss exit positively as a first step to more calm.
With Roiss leaving and Floren's division being absorbed by the new unit, only three top managers will remain in place: Leitner, Chief Financial Officer David Davies and Jaap Huijskes, head of exploration and production.
OMV said last month Huijskes would leave in 2016, more than two years early. His division had been the core of OMV's strategy to focus on upstream activities.
OMV spent $2.65 billion last year in its biggest acquisition to date, buying stakes in North Sea oil fields from Norway's Statoil, in search of a more reliable source than countries such as Libya - formerly one of OMV's major producers.
Davies, 59, a German-speaking Briton who has been OMV finance chief since 2002, has been mentioned by a source close to the company as a possible successor to Roiss.
(1 US dollar = 0.7907 euro)
(Additional reporting by Angelika Gruber; editing by Michael Shields and Keiron Henderson)
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