King of cost cuts, Pouyanne readies Total for new growth era

Tue Feb 14, 2017 2:14am EST
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By Bate Felix and Ron Bousso

PARIS/LONDON (Reuters) - When Patrick Pouyanne took over as the head of Total's (TOTF.PA: Quote) loss-making refinery division in 2011, he demanded a breakdown of costs for every single unit.

He was told such details didn't exist.

Frustrated, he sent his lieutenants to produce numbers showing which units of the French oil major were performing well and which needed urgent cost cuts to stop hemorrhaging profit.

Brutal cost-cutting became Pouyanne's trademark and has served him well ever since - he turned around the refining unit, more than doubling net income in just three years.

Today Pouyanne, who took over as Total's chief executive in 2014, is emerging from the worst oil price slump in a generation with his firm making more money than any of its peers except its much larger rival, U.S. oil giant ExxonMobil (XOM.N: Quote).

Pouyanne's relentless fight to cut costs has earned him respect from investors who want to see strong results in a poor market while pressing him for future growth plans.

"We are happy with Total's progression. Lower cash flow breakeven is a good thing and it is good to see they are progressing with new project development and defending future growth," said Jonathan Waghorn, fund manager at London-based Guinness Asset Management, which holds shares in Total.

Pouyanne, 53, was propelled to the helm of France's top listed firm after his predecessor, Christophe de Margerie, died in a plane crash in Moscow.   Continued...

Total Chief Executive Officer Patrick Pouyanne attends an economic forum in Paris, France, December 1, 2016. REUTERS/Jacky Naegelen