Twist in Woodside search as Coleman exits early, acting CEO installed
Woodside Petroleum’s search for a new chief executive has taken a bizarre twist, with the company’s board calling early time on Peter Coleman’s reign at the company, appointing a leading contender in an acting role, but saying they’re still searching for a permanent replacement.
Mr Coleman announced in
December that he planned to step down as chief executive in the second half of 2021, with the Woodside board widely expected to announce a replacement in the near term.
But Woodside up-ended its transition process on Tuesday, saying Mr Coleman would quit the board on April 19 and leave the company in early June, to be replaced on an acting basis by Meg O’Neill, Woodside’s executive vice-president development and marketing. Woodside did not say why Mr Coleman would depart the company ahead of schedule, before the appointment of a permanent replacement, and with the announcement made only days ahead of Woodside’s annual shareholder meeting on Thursday.
But industry sources on Tuesday downplayed any direct link between the Woodside announcement and the timing of Santos boss Kevin Gallagher’s decision this week to accept a set of $6m handcuffs to continue running Santos until at least 2025, with Mr Gallagher not believed to still be under serious consideration as a replacement for Mr Coleman.
Instead they suggest the long lead time Mr Coleman gave for his departure had begun to weigh on the veteran oil and gas executive, potentially leading to friction with the board ahead of his decision to leave before a replacement was appointed.
Ms O’Neill, along with Shell’s Zoe Yujnovich and BHP petroleum boss Geraldine Slattery, have been widely seen as the leading contenders for Woodside’s top job.
But Ms O’Neill has, bizarrely, only been appointed to run Woodside on an interim basis, with the Woodside board saying its “internal and external search for Woodside’s next CEO is progressing”.
Ms O’Neill will receive a “higher duties allowance” worth $500,000 a year on top of her base $1.8m salary while acting in the role.
Woodside said Mr Coleman would be eligible to receive pro rata incentive payments for his
partial service in 2021. Woodside chairman Richard Goyder thanked Mr Coleman for his service and said Ms O’Neill — who joined the company in 2018 from ExxonMobil amid expectations she would eventually inherit its leadership — had “demonstrated that she is an extremely capable executive, underpinned by her extensive experience and track record in the global energy sector”.
Mr Goyder is also the chairman of Qantas and the AFL Commission, but the Woodside succession is the first time the veteran businessman has overseen the selection of a new chief executive at a major company as a director or chairman.
Woodside is understood to have conducted a round of CEO interviews in late March, with its search for a new boss closely watched in the market as a possible signal for Woodside’s future direction.
Major European oil and gas companies, such as Shell and BP, have spent the last few years trying to reposition themselves within the energy space, investing heavily in renewable energy projects and utilities.
US majors Chevron and ExxonMobil have shown far less interest in transitioning their businesses away from fossil fuels, instead focusing on carbon capture and storage technology as the best means of reducing their carbon footprint and extending the life of their existing businesses.
The choice of an external candidate from either camp would likely be seen by the market as a pointer to Woodside’s likely future direction.
Mr Goyder did not say how long he expected the process to appoint a permanent Woodside boss to take, but is expected to field shareholder questions on the subject at its annual meeting on Thursday.
Pressure will rise on the company until it does so, however, as Woodside weighs whether to sanction its $16bn Scarborough project, an offshore gas development aimed at boosting its share of the LNG market.
Woodside made a decision a year ago to defer development of the Scarborough gas project due to the coronavirus-caused oil rout, with a final investment decision also set for the second half of 2021.
Woodside shares closed down 7c to $24.26 on Tuesday.