This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.nytimes.com/2014/10/23/business/international/thierry-desmarest-patrick-pouyanne-total-ceo-chariman.html

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Total, French Oil Giant, Picks 2 Insiders to Lead Company After Chief’s Death Total, French Oil Giant, Picks 2 Insiders to Lead Company After Chief’s Death
(34 minutes later)
PARIS — Total, the French oil giant, on Wednesday appointed two insiders to lead the company, moving swiftly to replace Christophe de Margerie, its chairman and chief executive, who died Monday in an airplane accident.PARIS — Total, the French oil giant, on Wednesday appointed two insiders to lead the company, moving swiftly to replace Christophe de Margerie, its chairman and chief executive, who died Monday in an airplane accident.
After an emergency meeting in Paris, the board said it had unanimously chosen Thierry Desmarest, Mr. de Margerie’s predecessor, for the role of chairman and Patrick Pouyanné, head of the company’s refining and chemicals business, as chief executive. At the end of next year, Mr. Pouyanné will assume both positions and Mr. Desmarest, a Total executive since 1981, will retire. After an emergency meeting in Paris, the board said it had unanimously chosen Thierry Desmarest, Mr. de Margerie’s predecessor, for the role of chairman and Patrick Pouyanné, head of the company’s refining and chemicals business, as chief executive. At the end of next year, Mr. Pouyanné will assume both positions, and Mr. Desmarest, a Total executive since 1981, will retire.
Both executives are well-known among Total’s nearly 100,000 employees and their peers throughout the industry. They take the company’s helm as falling oil prices have put pressure on earnings, and its strategy for growth — heavily reliant on projects in Angola, Kazakhstan, Nigeria and Russia — has come under scrutiny. Both executives are well known among Total’s nearly 100,000 employees and their peers throughout the industry. They take the company’s helm as falling oil prices have put pressure on earnings, and its strategy for growth — 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.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.
Shares of Total slipped on Wednesday afternoon in Paris after the news of the management changes but later recovered.Shares of Total slipped on Wednesday afternoon in Paris after the news of the management changes but later recovered.
Mr. Pouyanné has been president of the company’s refining and chemicals business since 2012, with responsibility for the large refinery that Total recently built in Jubail, Saudi Arabia. In its announcement on Wednesday, the board praised Mr. Pouyanné for successfully managing the transformation of the businesses in his portfolio.Mr. Pouyanné has been president of the company’s refining and chemicals business since 2012, with responsibility for the large refinery that Total recently built in Jubail, Saudi Arabia. In its announcement on Wednesday, the board praised Mr. Pouyanné for successfully managing the transformation of the businesses in his portfolio.
Mr. Pouyanné is a graduate of two of France’s elite engineering institutions, and he started his career in the government, where he worked in the Industry Ministry and as an adviser to former Prime Minister Édouard Balladur. He has been with Total since 1997, serving in important postings in Angola and Qatar along the way.Mr. Pouyanné is a graduate of two of France’s elite engineering institutions, and he started his career in the government, where he worked in the Industry Ministry and as an adviser to former Prime Minister Édouard Balladur. He has been with Total since 1997, serving in important postings in Angola and Qatar along the way.
The new leadership lineup is “solid and reassuring,” François Pelegrina of the C.F.D.T. trade union, told Agence France-Presse. Mr. Pouyanné is “a man who likes making decisions, with whom we can talk when there’s an important issue, who listens and doesn’t close his door,” he said.The new leadership lineup is “solid and reassuring,” François Pelegrina of the C.F.D.T. trade union, told Agence France-Presse. Mr. Pouyanné is “a man who likes making decisions, with whom we can talk when there’s an important issue, who listens and doesn’t close his door,” he said.
Mr. Desmarest, who was previously honorary chairman, returns to familiar ground. As chief executive of Total from 1995 to 2007, he built the company into a French national oil champion.Mr. Desmarest, who was previously honorary chairman, returns to familiar ground. As chief executive of Total from 1995 to 2007, he built the company into a French national oil champion.
At the time he took over, it was not clear that the modest-size company would survive the wave of mergers that reshaped the Western oil industry in the 1990s. But Mr. Desmarest pulled off a series of bold moves, culminating with the hostile $49 billion takeover of a French rival, Elf Aquitaine, which gave Total the necessary heft to secure its future.At the time he took over, it was not clear that the modest-size company would survive the wave of mergers that reshaped the Western oil industry in the 1990s. But Mr. Desmarest pulled off a series of bold moves, culminating with the hostile $49 billion takeover of a French rival, Elf Aquitaine, which gave Total the necessary heft to secure its future.
That merger was, along with Exxon’s takeover of Mobil, “the best of the megamergers” of that era, according to Andrew F. Gould, a former chief executive of the oil field services company Schlumberger.That merger was, along with Exxon’s takeover of Mobil, “the best of the megamergers” of that era, according to Andrew F. Gould, a former chief executive of the oil field services company Schlumberger.
Total is now the fourth-largest of the Western multinational major oil companies by market capitalization, after Exxon, Royal Dutch Shell and Chevron, and the second-largest company in France after the drug maker Sanofi.Total is now the fourth-largest of the Western multinational major oil companies by market capitalization, after Exxon, Royal Dutch Shell and Chevron, and the second-largest company in France after the drug maker Sanofi.
All oil companies are under pressure from investors to rein in costs, which have soared in recent years, sharply reducing the profitability of expensive new projects. The recent fall in crude prices has intensified the pressure for cuts. The company in September pledged to decrease operating costs by $2 billion a year by 2017.All oil companies are under pressure from investors to rein in costs, which have soared in recent years, sharply reducing the profitability of expensive new projects. The recent fall in crude prices has intensified the pressure for cuts. The company in September pledged to decrease operating costs by $2 billion a year by 2017.
Mr. Pouyanné looks well placed to preside over continued cost-cutting. As head of refining and chemicals, he has bolstered profitability in the businesses through a combination of selling and closing plants in low-margin Europe and divesting units like the Bostik adhesives businesses, which it is in the process of selling.Mr. Pouyanné looks well placed to preside over continued cost-cutting. As head of refining and chemicals, he has bolstered profitability in the businesses through a combination of selling and closing plants in low-margin Europe and divesting units like the Bostik adhesives businesses, which it is in the process of selling.
At the same time, Mr. Pouyanné has also invested in growth areas like a chemical joint venture in Port Arthur, Tex., a joint venture with German giant BASF and a new refinery in Jubail. Analysts at Bernstein in London estimate that the strategic shift has so far saved $400 million in costs and was on track to double returns on capital by 2015.At the same time, Mr. Pouyanné has also invested in growth areas like a chemical joint venture in Port Arthur, Tex., a joint venture with German giant BASF and a new refinery in Jubail. Analysts at Bernstein in London estimate that the strategic shift has so far saved $400 million in costs and was on track to double returns on capital by 2015.
While Total has ensured the continuity of management policy with its choice of insiders, it will have a much harder time replacing Mr. de Margerie, one of the industry’s and France’s most popular executives. Mr. de Margerie, with an outspoken and ready wit, had helped to soften the company’s image in France, a country not known for its love of corporations.While Total has ensured the continuity of management policy with its choice of insiders, it will have a much harder time replacing Mr. de Margerie, one of the industry’s and France’s most popular executives. Mr. de Margerie, with an outspoken and ready wit, had helped to soften the company’s image in France, a country not known for its love of corporations.
Mr. de Margerie will also be missed by his peers among the major Western oil companies who, having invested billions of dollars in Russia’s petroleum sector over recent years, argue that it is important to keep the doors open to President Vladimir V. Putin’s government despite the continuing standoff over Ukraine. Mr. de Margerie will also be missed by his peers among the major Western oil companies which, having invested billions of dollars in Russia’s petroleum sector over recent years, argue that it is important to keep the doors open to President Vladimir V. Putin’s government despite the continuing standoff over Ukraine.
Mr. de Margerie died as he was returning to Paris from a conference, when his Dassault Falcon jet crashed into a snowplow at Vnukovo airport outside Moscow. The Russian authorities said that the snowplow driver was drunk at the time and that negligence by airport management contributed to the accident. The driver denied having been intoxicated, and his lawyer has accused investigators of trying to scapegoat a low-level employee.Mr. de Margerie died as he was returning to Paris from a conference, when his Dassault Falcon jet crashed into a snowplow at Vnukovo airport outside Moscow. The Russian authorities said that the snowplow driver was drunk at the time and that negligence by airport management contributed to the accident. The driver denied having been intoxicated, and his lawyer has accused investigators of trying to scapegoat a low-level employee.
The upheaval at Total comes at a time of major management changes across the French energy sector. Luc Oursel, president and chief executive of Areva, the state-controlled nuclear technology leader, said this week that he was stepping down for health reasons.The upheaval at Total comes at a time of major management changes across the French energy sector. Luc Oursel, president and chief executive of Areva, the state-controlled nuclear technology leader, said this week that he was stepping down for health reasons.
And the government said last week that it would not renew the mandate of Henri Proglio, a businessman with close ties to former President Nicolas Sarkozy, to run Électricité de France, the giant power utility.And the government said last week that it would not renew the mandate of Henri Proglio, a businessman with close ties to former President Nicolas Sarkozy, to run Électricité de France, the giant power utility.