The financial press have a certain fetish about Total’s CEO Patrick Pouyanne. Here’s another gushing article:
Patrick Pouyanne pounced after Occidental Corp trumped Chevron’s $33 billion bid for Anadarko in April with an offer that includes raising financing by selling some of Anadarko’s operations worth up to $15 billion.
By keeping those in the know to a minimum, the French CEO was able to stay flexible in negotiations, take a swift decision and ensure there were no leaks until the binding deal worth $8.8 billion was announced on Sunday, a Total source said.
“Pouyanne proceeded in the same way he did with previous deals: a restricted task force, no bankers and no external counsel,” another source, close to the deal, told Reuters.
Throwing out the rulebook that expects CEOs to be surrounded by investment bankers and other advisers when dealmaking has become a trademark for the 55-year-old CEO and chairman of Total, who took the helm of the French energy major in 2014.
He has surprised investors with his acquisitions, such as buying Maersk’s oil and gas business in 2017 and Engie’s upstream LNG operations in 2018, setting one deal in motion after an unsolicited phone call with the controlling shareholder.
Shouldn’t we perhaps wait a little to see how rushing headlong into major deals while consulting almost nobody plays out over the long term? Look at this bit again:
a restricted task force, no bankers and no external counsel
You’d not hear this from fawning financial journalists, but Pouyanne has a reputation for yelling at anyone who doesn’t tell him what he wants to hear and demanding absolute obedience from all those around him (he’s a product of a grande ecole, after all). And here he is doing multi-billion dollar acquisitions in record time without involving bankers or outsiders. What could possibly go wrong?
For all the praise heaped on him, thus far Pouyanne is reaping the rewards of projects sanctioned by his predecessor. He has put considerable personal investment into Total’s Uganda project but that’s not exactly going according to plan:
French oil and gas major Total’s chief executive said on Thursday that the firm’s Ugandan Lake Albert oil project will be a personal priority this year after setbacks led to a delay on a final investment decision (FID) in 2018.
The project, which was expected to have been cleared last year, has been delayed due to disagreements over field development strategy, tax disputes and a lack of infrastructure such as a refinery or export pipeline.
Indeed, it has all the hallmarks of a development someone jumped into feet-first without carrying out proper due diligence and ensuring the right legal structures were in place. I don’t know if Total’s acquisition of Anadarko’s African assets is a genius move or not, but financial journalists should be asking questions over how decisions get made in that company, not blowing smoke up the CEO’s arse.