By Ed Crooks and Dino Mahtani
Published: November 23 2007 02:00 | Last updated: November 23 2007 02:00
In a development that is extraordinary even by the standards of the company, Regal Petroleum has replaced its chairman and chief executive the day after agreeing a memorandum of understanding with Royal Dutch Shell that was hailed as a very good deal for the company.
It was announced yesterday that John Ritson, chief executive, and Francesco Scolaro, chairman, had resigned, to be replaced by David Greer, an experienced former Shell executive, who will be chairman and chief executive.
The appointment throws into doubt the deal with Shell, under which Europe’s biggest oil company would pay $500m (£240m) for a 51 per cent stake in two gas fields in Ukraine and commit to investing $360m to develop them.
Mr Greer attracted attention earlier in the year when a motivational e-mail sent to his managers, borrowing phrases from General George Patton, was reported in the Financial Times.
He stepped down in the summer as deputy chief executive of the company developing Shell’s $20bn Sakhalin 2 project off the east coast of Russia.
He has been working as the chief executive of an exploration and production company controlled by Frank Timis, who owns about 20 per cent of Regal’s shares.
Regal shareholders, including Blackrock, had hoped for some time to bring Mr Greer on board as the company embarks on costly development in Ukraine.
But he was offered the job only yesterday after the Shell deal had been announced.
Mr Greer said he planned a “dramatic” increase in drilling in Ukraine, with the aim of “markedly” increasing proved reserves.
“We have to evaluate this Shell offer and compare it against other funding mechanisms,” he said.
Another possibility for funding the development would be through a share issue, which shareholders who backed Mr Greer’s appointment would probably support. Mr Timis said: “I see nothing stopping the Shell deal going ahead.”
Copyright The Financial Times Limited 2007
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