Woodside searching for successor to CEO Peter Coleman
Woodside boss Peter Coleman will retire in the second half of 2021 after 10 years in the role, saying it’s ‘the right time’.
Woodside Petroleum’s outgoing chief executive Peter Coleman has defended his record after a decade in the role but conceded frustrations over delays to a major West Australian gas expansion which has hampered the company’s growth ambitions.
His exit by the second half of 2021 has cast a shadow over a long-held ambition to sanction the $16bn Scarborough project, a big offshore gas development aimed at boosting its share of the LNG market.
“I think we’ll always have regrets but if you’re not trying hard and having a crack then you’re not going to have any regrets,” Mr Coleman told The Australian. “We’ve had a go at things and some things have worked and some things haven’t. Some things have gone to schedule, some things have not.”
Mr Coleman gave no indication at the company’s annual investor session on November 11 he was contemplating leaving the company, but said on Tuesday it was now time.
“On a personal side, I’ve had some people in my family pass away this year. It’s made me focus on what’s important for me and it’s just time.”
Santos boss Kevin Gallagher, who previously worked at Woodside, is seen as the favourite external choice to replace Mr Coleman after reviving the fortunes of the South Australian oil and gas producer since joining in early 2016. Woodside’s development and marketing chief Meg O’Neill is seen as the best placed internal candidate.
Woodside chairman Richard Goyder quipped the board had high ambitions as it begins a hunt for his successor.
“With the board you work through what personal attributes and professional qualifications you expect she or he to have. That person then looks like — with apologies to anyone — Jesus Christ. And then you work back from that,” Mr Goyder said on Tuesday.
A takeover bid for Woodside by energy giant Shell in 2001 was famously knocked back on national interest grounds, cementing the company’s reputation as an important strategic asset. Its next leader will likely draw close scrutiny from both the federal and WA governments.
Resources Minister Keith Pitt indicated a preference for a local CEO, echoing a recent call by Treasurer Josh Frydenberg for the next Rio Tinto boss to also be Australian.
“Mr Coleman still has some time to run in the role and I wish him well for his remaining tenure and his future,” Mr Pitt said. “While his replacement is a matter for Woodside, I always welcome Australians taking key roles with large players in the domestic resources sector.”
Woodside made a decision in March to defer development of the Scarborough project offshore WA due to the oil rout, with a final investment decision also set for the second half of 2021. The giant Browse gas field — the second part of Mr Coleman’s Burrup Hub gas concept and needed to help fill the NW Shelf facility — is also on the backburner, with a decision due sometime from 2023 onwards.
Speculation is now growing the leadership shake-up may see the Burrup development changed or even delayed further as a new CEO reassesses the company’s growth strategy.
However, Mr Coleman said the fundamentals of the projects remain sound despite frustrations.
“You always hope things can be done faster but there’s an old saying that unreasonable people change the world. And maybe from Woodside’s point of view, we’ve had to set ourselves some tough targets, we’ve had to negotiate hard because we are trying to change things that have been in place for a long time.”
The complex joint venture structure that owns the NW Shelf and Browse ventures in particular has been seen as a major hurdle for Woodside to navigate, with only four of the six NW Shelf partners also owners of the Browse project. Still, delivering Scarborough would help deliver the first leg of its Burrup ambition.
“It’s been frustrating along the way that we haven’t been able to progress as quickly as we had hoped. But the reality is we haven’t dropped our head at all and I’m very confident in the next year or so we will be well on our way to complete that vision,” Mr Coleman said.
“Everyone sees things through their own lens. And we just have multiple parties and the challenge for us has been always aligning so many parties together and so many combinations of views has been an extraordinary task we’ve tried to work our way through.
Finding a CEO with project execution skills may be paramount should Woodside proceed with Scarborough and an expansion of the Pluto LNG plant, Citi said.
“If final investment decisions are taken on Scarborough and Pluto-2, then we expect Woodside would be in a five-year execution phase with little latitude to do much else given the balance sheet would have been fully utilised. If this is the case, we would like to see an executive with deep experience in project execution,” Citi analyst James Byrne said.
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