Oil Giant, Total - Thierry Desmarest and Patrick Pouyanné to lead company after Christophe de Margerie's Death
After an emergency meeting in Paris, the board said it had unanimously chosen Patrick Pouyanné, 51, head of the company’s refining and chemicals business, as chief executive, and Thierry Desmarest, 68, Mr. de Margerie’s predecessor, for the role of chairman. At the end of next year, Mr. Pouyanné will assume both positions, and Mr. Desmarest, a Total executive since 1981, will retire.
The two executives are well known among Total’s nearly 100,000 employees and throughout the industry. They take the helm of the company as falling oil prices are putting pressure on earnings, and as its strategy for growth — Total is heavily reliant on projects in Angola, Kazakhstan, Nigeria and Russia — has come under scrutiny.
In September, the company cut oil production targets and announced plans to sell $10 billion in assets, saying it would focus on reducing costs — something investors will most likely expect Mr. Pouyanné to continue.
Despite recently trimming its production targets, Total is still expected to increase output faster than most of its European rivals, to 2.8 million barrels a day in 2017, from 2.1 million barrels a day in the first half of this year.
The company has identified problem areas like the long-delayed Kashagan oil and gas project in the Caspian Sea, off Kazakhstan, which Total does not operate, and Russia, where analysts think Total’s plans to develop a liquefied natural gas facility on the Yamal Peninsula may slip because of financing difficulties.
The appointments on Wednesday appeared to be well received by investors. After initially slipping on the news of the management changes in the early afternoon in Paris, Total’s shares rebounded in line with the broader European stock market, which was up around 0.5 percent in late afternoon trading. Total gained about 0.3 percent.
Total’s board appeared to be trying to reassure investors and other interested parties, like labor unions and the French government, by pairing Mr. Desmarest, an experienced hand, with Mr. Pouyanné, a veteran who can still be considered a rising star.
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