Woodside’s Meg O’Neill earns her stripes in tough merger negotiations with BHP

Woodside Petroleum’s new CEO Meg O’Neill says she joined Woodside because of its amazing history and she wanted to be part of its evolution. Picture: Woodside via NCA NewsWire

Tuesday was Megaday at Woodside Petroleum. At the close of business, chairman Richard Goyder spoke exclusively to The Australian on his new chief executive and managing director, Meg O’Neill, just as the news of the company’s $13.9bn acquisition of BHP Petroleum’s assets hit the wires.

“The board has just said to Meg: ‘If this is day one, where do we go from here?” he said. “You think it through, the timing is appropriate.”

Clearly it has been O’Neill’s ability to drive negotiations to merge BHP Petroleum assets with the business that impressed the board beyond doubt. It was an opportunity of a lifetime and she grabbed it with both hands.

“We were able to see with Meg over the last few months the way she stepped into not just the acting CEO role but stepped into a very key role with the team in these BHP discussions,” Goyder says. “She led very well through that, in a way which reinforced to us her capabilities beyond the areas that we had seen previously.”

Incredibly, for the past few months, O’Neill has been negotiating the BHP Petroleum deal with probably her main competition for the top job, in BHP’s Geraldine Slattery.

“When the board asked me to step in as acting CEO I’ve been treating it as ‘CEO, Acting’ and owning the role as if it’s my own,” says O’Neill.

“I’ve appreciated that with the opportunity it has really given me a feel for how to run the business, how to work effectively with the board, how to engage with external stakeholders, and really strengthen relationships at the top of the house.”

It’s been an excruciating wait since April 13, when Meg O’Neill was made acting CEO while the executive hunt commenced for a replacement to Peter Coleman.

Goyder says headhunters Spencer Stuart started with 347 candidates globally.

“So Meg’s done bloody well. It’s been a rigorous process, extended by the BHP thing and Covid-19 frankly. It gives her a very strong mandate,” he says.

Originally from Bolder, Colorado, Meg O’Neill was brought in by Coleman in 2018 from Exxon where they had both worked. At Woodside, she was chief operations officer and then head of marketing and developments. Technically excellent, as a business leader she was untested.

Goyder says the board had pretty clear view of what it was after: “A person of high integrity, but then a leadership capacity and also someone who understands the industry but is also commercial. She has been able to exemplify that over the last few months and demonstrate those capabilities which are less evident when you are in a functional role.”

From day one as acting CEO, O’Neill made changes, opening up top executive floors at the Perth headquarters and signalling a cultural shake-up, pressing safety and wellbeing. She drove operational efficiency hard, including the need for jobs cuts.

Woodside chairman Richard Goyder. Picture: AAP

She also stood up impressively to activist investors in June who compared Scarborough to Adani on emissions.

“The Scarborough reservoir contains almost no carbon dioxide, which makes it particularly attractive in a decarbonising world,” she responded at the time.

And when Andrew Forrest threw in a barb during the APPEA conference comparing Santos and Woodside to fossils, she told this columnist on stage: “Well I did look for my T-Rex costume, but unfortunately it was in the laundry this morning.”

Quietly but energetically spoken, as a newbie she seems to have fitted in well on the APPEA board too.

“Meg is authentic. What you see is what you get,” Goyder says.

The entire hiring process has been dogged by press speculation after what was perceived as a messy handover on 13 April, following Peter Coleman’s earlier than expected departure and suggestions of tensions between him and the board.

Days earlier, a potential candidate for Coleman’s replacement, Kevin Gallagher, renegotiated his package as CEO of Santos.

“There is no link between the BHP thing and Peter,” Richard Goyder insisted. “We were openly transparent on Peter at the time. Peter said basically he was done, it was time and we said we wanted to have a look at Meg in the role. And the rest of it is completely disconnected to that.

“And I’ve just spoken to Peter and he is absolutely thrilled on the news that Meg will take over and he is stoked that we have finally landed the BHP thing because he said it has been top of the list for many years.”

If there were tensions at board level, it is a credit to Goyder that Coleman’s pick for a successor was confirmed by the board.

The new CEO says she joined Woodside because of its amazing history and she wanted to be part of its evolution. “At the time I joined, that was about setting up the organisation for success in the Burrup Hub. That strategy has morphed a bit with a keen focus to get Scarborough to an investment decision,” she says. The joint interests of BHP and Woodside in Scarborough under the merger will be the next big leap forward in the journey. I’m beyond excited to lead the team through these changes.”

BHP Petroleum boss Geraldine Slattery.

Before the BHP deal was in the wind, Woodside’s growth opportunities for Scarborough looked different to the market, but O’Neill (who had eyes on a different scenario) doesn’t see it that way. “We looked at the growth opportunities on Woodside’s plate and on BHP Petroleum’s plate, both significant. Both companies are aligned to progressing it towards FID in 2021. The merger strengthens our ability to move the project forward.”

O’Neill says she and BHP Petroleum boss Geraldine Slattery have a very good working relationship after several years working together in the North West Shelf and Scarborough joint ventures. Asked if Slattery would stay on with the merged entity, she says: “That’s probably a question for Geraldine but I look forward to working with her – obviously we have businesses to run until the transaction is complete.”

Finally endorsed, Meg O’Neill’s portfolio runs from Africa (where she has worked extensively with Exxon) to the Gulf of Mexico. One of her biggest challenges ahead will be managing in a transitional economy. BHP is selling down its ESG problems.

“We think we are part of the solution,” Richard Goyder says. “We know we will meet our obligations. We know what all our stakeholders want and we intend to meet that, but we intend to be a ­really good company on the way through and generate good returns for our shareholders.”

“We have got to stay focused on our near-term priorities,” says O’Neill. “Reliable, cost-efficient operations and driving cost out of the business, being ready for Sangomar first oil in 2023, progressing the Scarborough project and advancing our new energy investments. And we will be working the merger in parallel.”