Sakhalin Energy CEO Ian Craig key player in Shell Executive reshuffle

Ian Craig, CEO, Sakhalin Energy

THE WALL STREET JOURNAL

Shell Mulls Sakhalin JV CEO To Head Africa Op – Source

JUNE 19, 2009, 5:28 A.M. ET

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDBS.LN) is considering Sakhalin Energy Chief Executive Ian Craig to head its embattled West Africa operation, a person familiar with the matter said this week, as Shell’s incoming chief executive, Peter Voser, extends its corporate shakeup.

As head of Sakhalin Energy Investment Co. Ltd., Craig presided over Shell’s single largest and most challenging oil and gas project before OAO Gazprom (GAZP.LN) took control in 2007.

If the appointment is confirmed, he will be tasked with restructuring the Nigerian operation, the bulk of Shell’s West Africa business and now its most problematic unit.

The reshuffle – if its goes forward – would be effective later this year. The person said that Ann Pickard, who currently heads Shell’s West Africa operation, may move to a vice-president position that would cover Australia.

A Shell spokesman declined to comment.

A Sakhalin Energy spokesman confirmed Craig’s appointment to a Shell position but referred to the Anglo-Dutch major for further comments. The move “is according to what has been planned and announced before – and still months to go before Ian moves on,” the Sakahlin Energy spokesman said.

Pickard didn’t comment on the personnel changes when contacted and Craig didn’t return a request for comment.

The move would be part of a wide-ranging revamp initiated by incoming chief executive Voser before formally taking over from Jeroen van der Veer July 1.

The corporate restructuring may have already contributed to at least one high-profile departure. Linda Cook, the head of Shell’s gas business, once seen as a contender for the chief executive job, resigned abruptly late May. The move came just before a merger of the gas unit with the exploration and production business was announced.

Shell appointed Craig, a former Enterprise Oil executive, at the helm of Sakhalin Energy in 2004, before the company unveiled delays and a doubling of the Russian venture’s project costs to $20 billion. The initial budget had been designed prior to Craig’s arrival and he has said the changes were tied to insufficient and overly optimistic planning by previous managers.

The problems were seized upon by Russia, with Gazprom ultimately taking control of the project with Shell as a minority partner and Craig remaining chief executive.

The Nigeria operation he would take over would bring new challenges for the executive, after years of attacks by militants and government underfunding hindered its potential. In the first quarter of this year, Shell lost 90,000 barrels of its share of Nigerian production from unrest and oil theft.

As for Pickard, an Australian appointment could also be rich in prospects as Shell has already said it was open to consolidation opportunities in this market.

-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; [email protected]

WSJ Article

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