Published: October 27 2008 20:11 | Last updated: October 27 2008 20:11
With 40 years of experience in the oil business, Paul Skinner, Rio Tintos chairman, is an obvious candidate to step into the chairmans shoes at BP.
However, his appointment would mark a historic step a career Royal Dutch Shell executive being appointed as the head of its greatest domestic competitor.
Mr Skinner joined Shell in 1963 while still a teenager and the oil company sponsored him as a law student at Cambridge University. After graduating, he spent several decades travelling the world with the Anglo-Dutch energy group, taking his wife and two sons to live in New Zealand, Greece, Nigeria and Norway.
Mr Skinner is highly regarded by oil experts who remember his time at Shell. He ran the downstream business refineries, marketing and retailing from 1999 to 2003, leading a successful restructuring of the US operation and helping build downstream into what today is seen as the groups best performing division.
He also made Shell the number one petrol retailer in the US and Germany.
It surprised many in 2000 when he was passed over for the chairmanship in favour of Sir Philip Watts who had more experience at the top level of the group and in oil exploration and production, but lacked Mr Skinners diplomatic finesse.
That setback proved a blessing in disguise. Mr Skinner escaped any taint from the reserves misreporting scandal that engulfed the company in 2004, by which time he had already crossed over to Rio.
That move in 2003 meant following Sir Robert Wilson, the miners long-time chairman and chief executive. Mr Skinner soon made the job his own, though, by overhauling the corporate culture and shaking off Rios reputation for conservatism.
At the time, the market was worried over Rios weak growth prospects, fearing it was failing to take advantage of the commodities boom to the same degree as more buccaneering rivals.
Mr Skinner presided over a big investment in new projects, including some in riskier parts of the world such as Mongolia and west Africa. Last summer, along with new chief executive Tom Albanese, Mr Skinner unveiled what was by far Rios boldest move, a $44bn (£28bn) takeover of Canadian aluminium producer Alcan.
At BP, Mr Skinner again faces the challenge of showing that the company is able to expand. The shares have fallen by almost 30 per cent in the past 12 months and now yield about 7 per cent based on the past four quarters of dividends: a level that expresses deep lack of investor confidence in the companys growth prospects.
Lew Watts, president of PFC Energy, the consultancy, said: Paul has huge experience in the conventional downstream indeed, conventional oil & gas world, but it remains to be seen whether conventional strategies are sufficient for an energy company of the future.
EDITORS CHOICE
BP chief upbeat on prospects – Oct-14
Investors warned of risk to oil sands plans – Sep-15
BP sees future with Russian partners – Sep-04
Divergent ratings for Shell and BP – Sep-02
Copyright The Financial Times Limited 2008
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