New gas boss starts a month early

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Published: Monday 9th February 2015 by The News Editor

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The new boss of exploration firm BG Group is starting a month early today, 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 in the wake of an outcry over his pay package.

Mr Lund had been expected to take the helm on 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 8.9 billion US dollar (£5.9 billion) hit, mainly from the slump in global commodity prices, as it reported a 5.03 billion US dollar (£3.35 billion) loss for the fourth quarter.

It also said that its planned capital expenditure for 2015 would be “significantly lower” than last year, falling between 6-7 billion US dollars (£4-£4.7 billion).

BG outlined its sensitivity to the fluctuating price of oil by revealing that a one US dollar movement had a 60-70 million US dollar (£40-47 million) 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 US dollars

BG became the latest firm to reveal a hit from the plunge, with BP saying it would slash spending by as much as six billion US dollars (£4 billion) this year and Royal Dutch Shell cutting back by 15 billion US dollars (£10 billion) over three years.

Chris Finlayson, BG’s previous boss, quit last April just 18 months into the job and chairman Andrew Gould has been in charge since on an interim basis.

Mr Lund was appointed to take the role permanently but late last year he faced an outcry over a new pay package that included a £15 million “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 Mr Lund will still be in line for a “golden hello” of up to £14 million – assuming maximum performance of a long-term bonus share award – plus an annual package of up to £14 million 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.

Published: Monday 9th February 2015 by The News Editor

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