(Press Association) – The new boss of exploration firm BG Group is starting a month early on Monday, a week after it took a multibillion-pound hit from the plunge in oil prices.
Helge Lund, who is joining after a decade at Norwegian energy giant Statoil, takes charge after the group sidestepped the threat of a shareholder revolt over his pay package.
Lund had been expected to take the helm on 2 March 2 but BG said the date “has been brought forward following agreement last week from his former employer to release him from his contractual commitments”.
Last week, BG took an $8.9bn (£5.9bn) hit, mainly from the slump in global commodity prices, as it reported a $5bn loss for the fourth quarter.
It also said that its planned capital expenditure for 2015 would be “significantly lower” than last year, falling between $6-7bn.
BG outlined its sensitivity to the fluctuating price of oil by revealing that a $1 movement had a $60m to $70m impact on earnings. The price of a barrel of Brent crude has fallen by more than half since last summer, when it was nearly $116.
BG became the latest firm to reveal a hit from the price plunge, with BP saying it would slash spending by as much as $6bnthis year and Royal Dutch Shell cutting back by $15bn over three years.
Chris Finlayson, BG’s previous boss, quit in April just 18 months into the job. Chairman Andrew Gould has been in charge on an interim basis.
Lund was appointed to take the role permanently but late last year he faced an outcry over a new pay package that included a £15m “golden hello”.
BG sidestepped a potential shareholder revolt by changing the terms of the package, meaning there would be no need for a planned shareholder vote.
But Lund will still be in line for a “golden hello” of up to £14m – assuming maximum performance of a long-term bonus share award – plus an annual package of up to £14m a year.
BG was created in 1997 when British Gas demerged into two separately listed companies, with Centrica having responsibility for the retail side of the business.
