Press Esc to close

WorldOil

World Oil News Center



BHP revamps management as new CEO prepares to take over

BY ROBB M. STEWART

MELBOURNE -- BHP Billiton incoming CEO Andrew Mackenzie has unveiled a sweeping overhaul of his senior management team, streamlining the structure and replacing three key figures earlier tipped as possible successors to retiring CEO Marius Kloppers.

Mr. Mackenzie, who was unveiled as CEO designate in February, stamps his authority on a company he will from May have to push to extract greater profits from assets including shale oil fields in the southern United States, copper mines in Chile and iron-ore pits in remote Western Australia at a time when prices for minerals are falling and the appetite of massive consumer China is less certain. The changes highlight a shift in focus from expansion and aggressive takeover attempts that marked Mr. Kloppers' time at the helm.

Key among the changes is the retirement of Michael Yeager, an oil industry veteran who has led the BHP' s petroleum division since April 2006 and worked closely with Mr. Kloppers. He will be replaced by Tim Cutt, currently Head of the diamonds and specialty products division, who will take BHP' s prospective potash assets with him to the portfolio.

The new structure lifts several people who had been running operations into the core executive committee, removing a layer of management.

"To ensure alignment between strategic and managerial leadership and better visibility at the operational level, the leaders of our five businesses will now join the group management committee (GMC) and will report direct to me" Mr. Mackenzie said in an internal announcement seen by the Wall Street Journal. "I see this as necessary to drive our agenda of operational excellence and improved productivity in a world that is unlikely to enjoy the pricing environment we have seen in recent years."

Mr. Mackenzie said the process also reflected the company' s approach to succession planning, promoting people from within. BHP has stressed the need for developing candidates for key roles. Mr. Kloppers, who lured Mr. Mackenzie from rival Rio Tinto just a month after officially taking on the role of CEO in 2007, has said one of the first tasks of any new leader is to identify potential successors.

Tim Schroeders, a fund manager at Pengana Capital in Melbourne, which owns shares in BHP, said it wasn' t surprising to see changes with Mr. Mackenzie' s arrival as CEO.

"There is an inevitable change when you bring in a new CEO. Plus a number of candidates for CEO who were pipped at the post are probably having career-defining moments" he said.

Mr. Cutt will take over as president of the petroleum business in July. He joined BHP in 2007 as President of production within the petroleum division, having earlier worked for almost 25 years with Mobil Oil and then Exxon Mobil. In his current role, he had been working to develop the Jansen potash mine in Canada, which analysts have said could cost more than $10 billion to build.

Alberto Calderon, who also had been suggested by investors and analysts as a potential replacement to Mr. Kloppers before his retirement was confirmed, steps down as CEO of aluminum, nickel and corporate development but will remain on as an advisor to Mr. Mackenzie until mid-2014. Marcus Randolph, CEO of ferrous metals and coal, is currently on sick leave until the middle of the year and also leaves the management committee. Mr. Mackenzie, in his letter to employees, said he would discuss on ongoing role for Mr. Randolph when he returns from receiving unspecified treatment.

Peter Beaven will add responsibility for assets in the base metals portfolio to his role as President of the copper division, while energy coal President Dean Dalla Valle will also take on the metallurgical coal operations. Daniel Malchuk, the President of minerals exploration, will be responsible for a division including aluminum, manganese and nickel operations.

Jimmy Wilson remains President of the iron ore business, Mike Henry stays President of health and safety and marketing but will also drive the company' s productivity agenda. CFO Graham Kerr will add responsibility for acquisitions and divestments and other duties to his role, the company said.

The management shuffle comes just a day after BHP affirmed production guidance for iron ore and petroleum for the fiscal year through June despite some weakness in the March quarter because of cyclones that affected shipping in Western Australia and maintenance at wells in the United States Gulf of Mexico. It said that the pace of iron ore output, which contributed nearly 50% of earnings in the first half of the year, was approaching 200 MMmt a year.

BHP separately said that Mr. Mackenzie will from next month earn a base salary of $1.7 million a year, an increase of $500,000, and have the potential to earn 160-240% of his base salary in short term incentive payments. The company has set his long term incentive award at 400% of the base value for 2013.

Dow Jones Newswires

04/17/2013

 

Bookmark and Share


WO DATA HUB

EngineeringTablesIcon-Large

Engineering Data Tables

World Oil's specialized upstream Engineering Data Tables featuring the Drill Bit Classifier, Tubing Tables and more. Get Total Access today.

WO SUPPLEMENTS

2013 Fracturing Technology

2013 Fracturing Technology

MEDIA CENTER

By Digital Publisher

Drill Bit Classifier World Oil published its renowned Drill Bit Classifier in September 2013. The Drill Bit Classifier is a comprehensive listing of major manufacturers' d...

ENERGY EVENTS

Upcoming Events