Total SA announced that Patrick Pouyanne, head of refining and chemicals, has been appointed as the new CEO of the company, succeeding Christophe de Margerie.
On Wednesday the board of directors decided to once again split the roles of chief executive and chairman, which were previously both held by Mr. de Margerie.
Thierry Desmares, who was CEO of Europes second-largest oil company from 1995 to 2007, will take the role of chairman of the company. People close to the group said he could make changing chief executives easier.
Two people were considered by the board for the open position – Mr. Pouyanne, who joined the company in 1997 and contributed greatly in areas like explorations and production, and Philippe Boisseau, head of marketing and new energy operations since 2012. In 2011, Mr. Boisseau led the acquisition of the U.S. solar power company SunPower, which was valued at $1.4 billion.
However, shareholders would have to approve of the decision as Mr. Pouyanne is not yet a member of the board.
“We have believed for some time that Pouyanne was being groomed for the top job” Lain Reid, an analyst at BMO Capital Markets Ltd., wrote in a note. “He has already made great strides in improving the financial performance of his business unit, whilst he also has an extensive exploration and production background, both clear qualifications for the role.”
Mr. Pouyanne takes the wheel as lower prices and weak returns cripple profits, while operations in Russia continue. The new CEO will have to deal with the situation in Yamal Peninsula, where former CEO promised to push ahead with the OAO Novatek-led project. That may prove challenging with the recent events in Ukraine.
“Total needs to focus on executing projects including in Russia to deliver growth over the next three years while at the same time keeping costs and operating expenditure under control,” Ahmed ben Salem, an analyst at Oddo & Cie, said by e-mail.
In 2012 Total targeted to sell between $15 billion to $20 billion worth of assets by the end of this year, so far the company achieved $16 billion, with another $4 billion underway. The French oil company intends to continue the trend and dispose of a further $10 billion in assets by 2017.
Total SA gained 3.46% on Tuesday and closed at €44.43 in Paris. On Wednesday, the stock fell 0.41% to trade at €44.24 at 12:37 GMT, marking a 0.27% one-year increase. According to the Financial Times, the 30 analysts offering 12-month price targets for Total SA have a median target of €54.25, with a high estimate of €62.00 and a low estimate of €42.50. The median estimate represents a 22.12% increase from the close last price of €44.43.
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