Transocean CEO's exit linked to lack of vision in tough market

Fri Feb 20, 2015 1:13am EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Terry Wade and Anna Driver

HOUSTON (Reuters) - Barely two months into his new job as the head of the world's largest offshore driller, Steven Newman was steering Transocean through the 2010 Gulf of Mexico oil spill, quickly earning a reputation as a CEO with a steady hand.

Too steady, perhaps.

Since Sunday Newman, 50, is out of work. People inside and outside the company say his abrupt departure reflected in part the board's view that the 20-year company veteran was too conservative and lacked a bold vision for a period of dramatic industry change that began at the end of the last decade.

Newman also had to contend with two members of the 12-member board who represent activist investor Carl Icahn, who demanded a big dividend increase in 2013 and then saw it slashed by 80 percent this month in response to a sharp market downturn.

Icahn did not return phone calls and Newman could not be reached. A Transocean official declined to comment.

It is not clear what investors such as Icahn might have in mind for the company.

For now, according to one banker and other sources, Transocean does not appear to be a takeover target because it is too large to be swallowed by nearly any one of its competitors. According to a Transocean presentation, its fleet is about 25 percent larger than its biggest rivals, Ensco Plc and Seadrill Ltd, which are also grappling with the downturn.

Newcomers, the sources said, would also have trouble gaining entry into the highly technical and risky world of offshore drilling.   Continued...

 
Steven Newman, former President and CEO of Transocean Ltd., testifies before a Senate Energy and Natural Resources hearing on the accident in the Gulf of Mexico involving the offshore oil rig Deepwater Horizon in Washington, May 11, 2010.  REUTERS/Jason Reed