Woodside Petroleum Ltd. (WPL), Australia’s second-largest oil and natural gas producer, named Peter Coleman, a 27-year Exxon Mobil Corp. (XOM) veteran, as the new chief executive officer to replace Don Voelte.
The 51-year-old Australian will start May 30, the Perth- based company said in a statement today. Coleman was previously vice president of Exxon Mobil Development Co., where he led work on more than $40 billion of projects worldwide.
He takes control of a company that’s been the subject of takeover speculation since its biggest shareholder, Royal Dutch Shell Plc (RDSA), sold part of its stake last year. Coleman’s challenge will be to drive development of Woodside’s liquefied natural gas ventures, including the A$30 billion ($32 billion) Browse project, as industry costs rise and LNG demand soars in Asia.
Voelte “was quite aggressive -- that was probably needed by Woodside to jolt them into activity,” said Peter Rudd, mining and resources research manager at Armytage Private Ltd., a Melbourne-based investment firm that oversees A$420 million in assets and owns Woodside shares. “Now they need a man who has a good production background to bring projects on stream and manage costs. Coleman has the appropriate background.”
Nebraska-born Voelte, 58, who joined the company in 2004, plans to leave at the end of June. Woodside shares have almost tripled since April 5, 2004, when Voelte took over. The stock has gained 5.5 percent in the past year, lagging behind the 9.7 percent advance in the S&P/ASX 200 Energy Index.
‘Coleman a Surprise’
Woodside, which has a A$36 billion market value, dropped 2.5 percent to A$45.03 at the 4:10 p.m. Sydney time close, compared with a 1.8 percent decline in the benchmark S&P/ASX 200 Index. That compares with a 3.1 percent fall for Santos Ltd. (STO) and a 2.8 percent decline for Oil Search Ltd., two other oil and gas producers that trade in Sydney.
“Coleman is a surprise, but investors are asking themselves if he’s a good successor, and most would say he probably is,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “The sell-off is in line with others.”
Coleman must unite Woodside’s Browse partners -- BHP Billiton Ltd. (BHP), Chevron Corp. (CVX), Royal Dutch Shell Plc and BP Plc - -- and resolve a dispute with East Timor over the development of the Sunrise gas field. Some Browse partners may want to change the plan for the processing of the gas, analysts including Neil Beveridge of Sanford C. Bernstein & Co. have said.
‘Ticks the Boxes’
“He’s got the LNG experience, and he’s got the big company experience, and from that perspective Woodside ticks a couple of boxes,” Andrew Williams, head of energy research at RBC Capital Markets in Melbourne, said by phone. “Having worked at Exxon, that will help in dealing with companies like Chevron.”
The proposed Sunrise LNG venture is at a stalemate, Voelte said in April. The government of East Timor wants an LNG plant built there and not offshore on a floating platform.
Woodside remains in talks with The Hague-based Shell about the European oil company’s remaining 24 percent stake in the company, Voelte said last week. Woodside was “surprised” when Shell decided to sell 10 percent last year, he said in February. Woodside wanted to be “proactive” in talking with Shell should the oil producer move to sell the rest of the shares, he said.
Shell’s potential sale of the Woodside interest has prompted speculation that Melbourne-based BHP or another company may buy the stake or the whole company.
Coleman, born in Australia’s Victoria state and educated at Monash University and Deakin University, had responsibility for ventures such as the $15 billion LNG project operated by Exxon in Papua New Guinea.
The former Exxon executive, who began his career with the company in 1984 as a drilling engineer at Australian unit Esso, will receive A$2.1 million a year, plus performance-based awards and a “sign-on” incentive of Woodside shares valued at A$3 million, Woodside said today.
Woodside announced in October that Voelte planned to retire in the second half of 2011 and that it would consider executives inside and outside the company as possible successors. Voelte is a former head of exploration at Mobil Corp.
Top internal contenders to succeed Voelte were Kevin Gallagher, executive vice president of the North West Shelf project, and Lucio Della Martina, who runs Pluto, analysts including Nomura Holdings Inc.’s Xavier Grunauer said.
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