Oil Search CEO Keiran Wulff quits after behaviour ‘complaints’
Oil Search has been rocked by a fresh crisis after chief executive Keiran Wulff abruptly resigned following a series of complaints about his bullying behaviour.
Oil Search has been rocked by a fresh crisis after chief executive Keiran Wulff abruptly resigned from the Papua New Guinea LNG producer following a series of complaints about his bullying behaviour.
Mr Wulff has been on sick leave since late June, according to sources, with complaints over his management style made by staff at its Sydney, Port Moresby and Alaskan offices over the last year.
The sudden departure of Mr Wulff after 17 months in the role followed a whistleblower complaint received in mid-June with an investigation concluding inappropriate behaviour amid long-term issues with ill health which had recently deteriorated.
“He resigned on medical grounds. We can’t go into the detail of the medical conditions for obvious reasons,” Oil Search chairman Rick Lee said.
“But we had alerted him to the issues raised in the whistleblower statement and entered into discussions with him, and that was the result of those discussions.”
An investigation was also conducted over an alleged terse meeting between Mr Wulff and Oil Search’s finance chief designate Ayten Saridas which is understood to have cleared its former CEO.
Ms Saridas left the company on December 1 after just three months in the role.
Oil Search declined to comment while Ms Saridas also declined to comment citing a confidentiality agreement. Mr Wulff did not respond to requests to comment. The company’s shares fell 5.2 per cent to $3.67.
The shake-up marks the latest leadership ruction in Australia’s energy sector after Woodside Petroleum called early time on Peter Coleman’s reign and the bombshell resignation of chief executive Brett Redman at AGL Energy.
Mr Wulff’s shock resignation for health reasons did not pass the “sniff test”, Credit Suisse said.
The shake-up means Oil Search now has a track record of poor executive management including Ms Saridas’ exit.
“Once again, the reasoning provided for the departure doesn’t pass the ‘sniff test’ to us, just as it didn’t when the CFO designate departed after only a few months last year, which may now be viewed through a new lens,” Credit Suisse analyst Saul Kavonic said.
Mr Lee and the board now face pressure to resign, according to MST Marquee analyst Mark Samter.
“I can see no way that the Oil Search chairman’s job is tenable, nor those of his board members who have presided over the debacle of the past 18 or so months. With mistake after mistake, and delays in even making those mistakes, they have lost the right to try and rectify things,” Mr Samter said.
While chief financial officer Peter Fredricson was named acting CEO, the move casts doubt over the prospects for Oil Search’s $US3bn ($4.1bn) Alaskan oil project, awaiting an investment decision in the last quarter of 2021.
The interim Oil Search chief appeared to walk back a year-end deadline for the investment go-ahead and an equity selldown in the project.
“It’s not targeted to a specific date,” Mr Fredricson said. “The market has felt that was the case in the past but it’s certainly not the case today.
“The final investment decision for the project will be dependent on ourselves and our partners agreeing we have achieved an appropriate level of risk with an equity selldown or a midstream infrastructure selldown. Those are the things that come first. We are not constrained here by any targeted date whatsoever.”
Analysts expect Oil Search will be forced to find an external CEO given the need for a refresh and limited internal candidates.
“Unfortunately, we see limited internal candidates within the company that have the right PNG and Alaska experience and qualifications for the role … and therefore we see the company as having little choice but to immediately search outside to fill the role,” RBC analyst Gordon Ramsay said.
“We think this outside selection process could take more than six months.”
Mr Wulff – who replaced long-term managing director Peter Botten after 25 years in the top role – was also an experienced Oil Search executive, who returned to the company in 2015 after seven years away from the Papua New Guinea-focused company, including a short stint at Buru Energy.
He was regarded as the logical internal replacement for Mr Botten after spending time in both PNG and Alaska where the company is looking to develop a new source of income, despite critics questioning whether investing in a major oil project runs against growing pressure to cut emissions and tackle climate change.
Mr Wulff was only a month into the job when a huge oil price crash sparked by the pandemic up-ended the industry as oil plunged to a two-decade low teetering just above $US15 a barrel.
He made the tough decision to slash nearly 600 jobs, a third of its workforce, as part of a major cost-cutting drive. He described the year as “very humbling” but an improvement in crude prices since allowed Oil Search to just scrape in with a profit in February.
A new CEO could look to sell Alaska and at least try and recoup book value, Mr Kavonic said. “The PNG business could then be a target for acquisition as the purchase of Alaska was always in part a takeover deterrent in our view.”
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