Nexen CEO resigns; Long Lake project in focus

Tue Jan 10, 2012 12:28am EST
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(Reuters) - Nexen Inc NXY.TO said its Chief Executive Marvin Romanow is leaving the Canadian independent oil producer effective immediately and Chief Financial Officer Kevin Reinhart will serve as interim CEO.

The company is conducting a search for a new CEO, Nexen said in a statement. Nexen spokeswoman Patti Lewis declined to comment on the management change and said the company would offer further details on Tuesday.

Gary Nieuwenburg, executive vice president of Nexen Canada, is also leaving the company effective immediately, Nexen said.

Nexen's board felt it was time for change and new leadership, and that there wasn't one specific factor that led to these executive changes, FirstEnergy Capital analyst Michael Dunn said in a note.

"However, given the level of association and involvement of Messrs. Romanow and Nieuwenburg with the Long Lake project, it is safe to assume that continued disappointments there played a role in these departures," Dunn said.

Nexen's C$6.1 billion Long Lake project in northern Alberta has never come close to producing at its nameplate capacity of 72,000 barrels of oil per day due to a series of technical and operating issues.

Nexen holds 65 percent of Long Lake, while China's top offshore oil company, CNOOC Ltd (0883.HK: Quote) holds the remaining stake. Nexen has been forced to spend billions of dollars to fix the poorly performing project.

Nexen, which also failed to renew its license to operate in Yemen, has seen its shares fall 21.6 percent over the past 12 months, compared with a 13 percent drop in the Toronto Stock Exchange's oil and gas group index. .SPTTEN.

While investors have pressed the company to take fast steps to improve the share price, Romanow looked mostly to longer-term prospects to raise the company's production and profits.   Continued...