Centrica’s CEO Eyed as BG Group’s Top Man Replacement
The chairman of BG Group PLC (LON:BG) Andrew Gould has approached Centrica’s (LON:CNA) chief executive Sam Laidlaw about running the British oil and gas giant, with BG’s current CEO is set to retire next year, The Sunday Times reported on 7 October 2012.
Laidlaw’s potential appointment would mark a significant shake-up at Centrica and BG Group, with both companies having their roots in the old utility British Gas. After its privatisation by Margaret Thatcher in 1986, the company split and Centrica stayed in the power supply business while BG became an international oil and gas producer and explorer.
Currently, BG Group is the UK’s ninth-largest company with oil and gas fields in 25 countries and a market value of £44 billion. Project delays and cost overruns are amongst the company’s main problems, experienced at a time when the chief executive Sir Frank Chapman prepares to retire next June, when he turns 60. Finding a replacement for Chapman is of priority to BG Group’s chairman Andrew Gould. His first choice appears to be Centrica’s current CEO, who has already been approached with a proposal.
A respected figure in the oil and gas industry, Laidlaw is making big progress at Centrica, Britain’s biggest utility which provides gas and electricity to 16 million customers. Currently the company’s CEO is set to make a critical decision: whether to build Britain’s first new nuclear reactor for more than 20 years or pull out of the multi-billion project. Yet, much of the heavy lifting Laidlaw was brought in to do at the company is finished. At the beginning of his work at Centrica, the utility sourced its gas only from dwindling North Sea reservoirs. Laidlaw struck import deals with Qatar, started exploring in the Caribbean waters of Trinidad and Tobago and built up the company’s American arm. He also bought a stake in the nuclear generator British Energy.
!m(/uploads/story/542/thumbs/pic1_inline.png)The rebalancing has won the approval from the City, but there is believed to be growing discord on the board about what to do next. The expanding oil and gas operations sit uneasily beside the utility arm, which provides power on razor-thin margins. Some City analysts argue that the company should be broken in two.
At this stage, taking the helm at BG Group could be enticing for Laidlaw, though it is still not clear whether he is willing to leave Centrica. According to The Sunday Times, BG’s chairman is also considering at least one other external and three internal candidates. BG’s chief operating officer Martin Houston was seen as one of the top potential successors though it is thought that Gould has recently stepped up his recruitment efforts.
A BG spokesman told Dow Jones Newswires that the process of choosing the new CEO is “a timely and orderly succession” that is “well advanced,” so the company has “nothing more to add until it’s ready to make an announcement.”
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