Cairn Energy CEO Steps Down amid Sweeping Board Changes
LONDON (Dow Jones Newswires), June 16, 2011
Cairn announced a sweeping overhaul of its senior management team, as the company looks to strengthen its exploration emphasis following the expected completion of a delayed transaction in India.
Cairn said its founder and long-standing chief executive, Sir Bill Gammell, will relinquish his position at the helm of the Edinburgh-based oil and gas explorer in favor of Legal and Commercial Director Simon Thomson. Gammell will in turn replace Norman Murray as chairman, who leaves to take up the same position at oil and gas services company Petrofac Ltd. (PFC.LN).
Two other board members will also step down. The company will retain some other figures, including Deputy Chief Executive Mike Watts, a leader in its exploration venture.
The changes come amid expectations that Cairn will soon close a deal to sell a majority stake in its India unit to Vedanta Resources. The time-frame of the Vedanta deal, worth about $9.6 billion in cash, has been delayed amid a royalty dispute with the Indian government. Indian Oil Minister Jaipal Reddy said recently the matter could be discussed at a cabinet meeting later this month.
Following the reorganization, Gammell, 58, will retain his position as chairman of Cairn India, tasked with overseeing the successful conclusion of the company's India deal.
In addition to the change to the firm's top leadership, Cairn said two other board members would be stepping down. Chief Operating Officer Malcolm Thoms and Engineering and Operations Director Philip Tracy will also depart, said Cairn.
Finance Director Jann Brown will take up the position of managing director, reporting to new CEO Thomson.
"Cairn's key strength of entrepreneurial exploration remains the focus, offering investors significant growth potential in combination with underlying asset value and balance sheet strength," said Thomson.
Cairn shares were lower in line with other U.K. oil producers following the announcement. At 1107 GMT, they were down 8 pence, or 1.9%, at 403p, underperforming the broader FTSE 100 index, which was down 1.1%.
Deutsche Bank said it viewed the changes "to be a constructive step forward that is focused on energizing the group for its next steps of growth."
Deutsche highlighted the fact that Watts will remain as a positive. Watts has been the architect of Cairn's Greenland operations, where the company is currently drilling exploratory offshore wells.
Copyright (c) 2011 Dow Jones & Company, Inc.
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