Statoil persuades group veteran Saetre to become permanent CEO

[OSLO] Norwegian energy group Statoil has persuaded 35-year company veteran Eldar Saetre to take over as chief executive despite his initial reluctance, seeing him as a safe pair of hands during a challenging time for the oil sector.

The Statoil board has been criticised by some analysts and media for not having a succession plan in place when Helge Lund joined Britain's BG Group in mid-October after a decade at the helm of Norway's biggest company.

Along with other oil majors, Statoil has cut costs, sold assets and trimmed capital expenditure in response to the 50 per cent collapse in oil prices over the past seven months. But it has been reluctant to say what cheaper oil will mean for many of its projects, including expensive drilling in the Arctic and the production of shale oil and gas in the United States.

The appointment of former finance chief Mr Saetre, who has been acting president and CEO since Mr Lund's departure, came as something of a surprise on Wednesday, given his original insistence that he did not want the job permanently.

Though the 59-year-old retains the right to retire at 62, Mr Saetre emphasised that his commitment to Europe's fifth-largest oil major should not be questioned.

"I take on the job with a long-term perspective ... I will do it for as long as the board and I agree that I am the right man," Mr Saetre said in a statement.

Chairman Svein Rennemo, meanwhile, highlighted that Mr Saetre had been the board's first choice.

"Eldar stands out with his long experience and ability to create change. Those are qualities we need in times like these," he added.

Investors, however, may take a little more convincing. By 0958 GMT shares in the company had fallen 2.6 per cent to 137.90 Norwegian crowns.

Mr Saetre will be Statoil's fifth chief executive since the state-controlled company was founded in 1972 and the first to be recruited internally.

"Our key focus will be on the Norwegian continental shelf, where we will look to deepen and extend our position. At the same time we will continue to pursue international opportunities where we have competitive advantages," he said.

Danske Bank analyst Andre Benonisen acknowledged that the appointment was a little surprising after Mr Saetre's original declaration but believes that the former CFO's length of service with the company makes him a safe choice.

Statoil will present fourth-quarter earnings and an annual strategy update on Friday, with some analysts looking for a cut to the quarterly dividend to preserve cash.

Mr Saetre, however, has already rejected such a move.

"Our dividend policy remains completely firm," he told Reuters as recently as Jan 8.

REUTERS