Woodside Petroleum Ltd. Chief Executive Officer Don Voelte plans to retire in the second half of 2011 after the company’s A$13 billion ($12.8 billion) Pluto natural gas project begins production.
Woodside, whose shares have almost tripled in Sydney since Voelte joined Australia’s second-largest oil and gas producer in April 2004, is considering executives inside and outside the company as possible successors, it said in a statement today.
Pluto is set to become the fastest liquefied natural gas venture developed, with the initial discovery of the field in 2005, the Perth-based producer says on its website. The development is among more than a dozen proposed LNG projects in Australia and Papua New Guinea seeking to tap rising Asian demand for cleaner-burning fuel to curb carbon emissions.
“His legacy will be the Pluto project,” Adrian Wood, an analyst at Macquarie Group Ltd. in Sydney, said by phone today. “Because he has done it so quickly, he has beaten major bottlenecks” as rivals compete for customers and labor.
The Nebraska-born executive, who previously served as head of exploration at Mobil Corp. and as an executive at Atlantic Richfield Co., will have been at the company more than seven years when he steps down. Voelte, 57, said he wants to give the board enough time to transition to a new chief executive. Voelte doesn’t intend to take another job at a publicly-listed company, he said at a news conference in Perth today.
Woodside, which has hired Heidrick & Struggles to search for a new CEO, didn’t identify potential replacements. Kevin Gallagher oversees the North West Shelf project, which started LNG deliveries in 1989, and Lucio Della Martina runs Pluto. Feisal Ahmed is executive vice president of project development.
Woodside said last year that the costs of the Pluto development would rise by as much as A$1.1 billion as labor disputes disrupted construction at the site in Karratha, about 1,600 kilometers (994 miles) north of Perth. The company also delayed a decision to expand the project until next year after an exploration campaign progressed slower than expected.
“In Australia, there’s particular challenges coming,” Voelte said at Woodside’s offices. “Skill shortages, enough folks to work, industrial relations, whole issues around how you operate safely, how do you build projects economically.”
Woodside declined 0.7 percent to A$43.72 at the 4:10 p.m. close of Sydney trading, while the benchmark S&P/ASX 200 Index was little changed. The shares closed at A$15.97 on April 5, 2004, the day Voelte started.
‘Own’ LNG Project
The new chief executive will need to “own” the proposed Browse LNG project, Voelte said. Woodside and its partners in the venture early this year chose a site in the Kimberley region to process gas from the Browse field and target a decision on whether to commit to the project in 2012.
“For a project which is tens of billions of dollars, the next big step for Woodside, you don’t just approve a final investment decision and then hand it to a new CEO,” said Voelte, who has a degree in civil engineering from the University of Nebraska and is a member of the Society of Petroleum Engineers.
Woodside is more certain the $30 billion development in Western Australia will go ahead after the state government started a forced acquisition of land for the venture, the company said Sept. 2. The move to take over the site followed the failure of local indigenous groups with claims to the land to reach agreement, Premier Colin Barnett said at the time.
The Australian oil producer also has clashed with East Timor over how to develop the Sunrise LNG project.
Mark Chatterji, the company’s chief financial officer, plans to leave at the end of 2010 to return to the U.S. for family reasons, Woodside said in February.