October 21, 2014 / 2:18 AM / in 3 years

Total CEO de Margerie killed in Moscow as jet hits snow plow

MOSCOW/PARIS (Reuters) - Christophe de Margerie, the charismatic and outspoken chief executive of the French oil company Total (TOTF.PA), was killed when his private jet hit a snow plow as it was taking off from Moscow’s Vnukovo airport on Monday night.

An investigator looks at the wreckage of Christophe de Margerie's Dassault Falcon jet at Moscow's Vnukovo airport in this still image taken from video, October 21, 2014. REUTERS/Russian Investigative Committee/Handout via Reuters TV

His death leaves a void at the top of one of the world’s biggest listed oil firms at a difficult time for the industry as oil prices fall and state-backed competitors keep them out of some of the best oil exploration territory.

De Margerie, 63, was a strong opponent of Western economic sanctions against Russia over its actions in Ukraine, and had been attending a meeting on foreign investment with around 30 other foreign executives at Russian Prime Minister Dmitry Medvedev’s country residence in Gorki near Moscow.

The crash occurred around midnight Moscow time as his Dassault Falcon was taking off for Paris in poor visibility. The plane’s three crew were also killed, but television footage showed the snowplow driver seemingly unhurt.

Total is France’s second-biggest listed company, with a market value of 102 billion euros ($130 billion) that makes it the fourth largest Western oil company, behind Exxon (XOM.N), Royal Dutch Shell (RDSa.L) and Chevron (CVX.N).

In a brief news conference on Tuesday, Total’s secretary-general, Jean-Jacques Guilbaud, said its governance committee and board would meet “as soon as possible”.

“Total will keep going,” he said. “The group is organized to ensure the continuity of its governance.”

With his distinctive bushy mustache and outspoken manner, de Margerie was one of the most recognizable of oil executives and a personal friend of French President Francois Hollande.

Prime Minister Manuel Valls said France had lost “an extraordinary business leader who turned Total into a world giant”.

Ben van Beurden, chief executive of Total’s rival Royal Dutch Shell, said de Margerie had been “a larger than life character, a leader respected across the energy industry and a friend”.

De Margerie ran Total’s exploration and production division before becoming CEO in 2007, but only took full control with the additional role of chairman in May 2010.

Known inside the company as “The Big Mustache”, he said in July that he should be judged on the new projects launched on his watch, including a string of African fields.

He also said then that Total, which has not announced any official succession plan, would name a successor from within.

POTENTIAL SUCCESSORS

Philippe Boisseau, head of Total’s renewable energy division, and Patrick Pouyanne, who was charged with reducing exposure to unprofitable European refining sectors, have long been seen as potential successors.

By 9.20 a.m. EDT, Total’s share was up 2.6 percent at 44.05 euros, broadly in line with other European majors such as Shell and BP (BP.L).

Barclays France director Franklin Pichard said de Margerie’s death “shouldn’t trigger insurmountable management difficulties”.

Ion-Marc Valahu, fund manager at Swiss investment firm Clairinvest, agreed. “I think the Total management is pretty strong,” he said. “The board has been there for a long time.”

De Margerie was a staunch defender of Russia and its energy policies, as the conflict in Ukraine has raised tensions with the West to levels not seen since the Cold War, and triggered economic sanctions against Moscow.

Total is one of the biggest foreign investors in Russia, where its output is due to double by 2020.

De Margerie told Reuters in July that Europe should stop thinking about cutting its dependence on Russian gas and focus instead on making those deliveries safer.

He said tensions between the West and Russia were pushing Moscow closer to China, as illustrated by a $400 billion deal to supply Beijing with gas that was clinched in May.

“Are we going to build a new Berlin Wall?” he said. “Russia is a partner and we shouldn’t waste time protecting ourselves from a neighbor ... What we are looking to do is not to be too dependent on any country, no matter which. Not from Russia, which has saved us on numerous occasions.”

Russian President Vladimir Putin sent condolences, praising de Margerie’s commitment to Russian-French relations.Total said last month that sanctions would not stop it working on the Yamal project, a $27 billion joint venture to tap vast natural gas reserves in northwest Siberia that aims to double Russia’s stake in the fast-growing market for liquefied natural gas. De Margerie said then that Europe could not live without Russian gas, and that there was no reason to do so.

Russia accounted for about 9 percent of Total’s oil and gas output in 2013. The firm said in April that Russia would become its biggest source of oil and gas by 2020 due to Yamal, and its partnership with the Russian energy company Novatek (NVTK.MM).

De Margerie also worked to ensure that Total would be in pole position to return to Iran if Western economic sanctions there were lifted.

However, Total’s dealings with Iran and Iraq in the 1990s dogged de Margerie’s tenure. Last year, the firm agreed to pay $398 million to settle U.S. criminal and civil allegations that it had paid bribes to win oil and gas contracts in Iran.

Separately, Total, de Margerie himself and 17 other executives were tried in France last year for corruption linked to the U.N. oil-for-food program in Iraq, in which $1.8 billion flowed illicitly to Saddam Hussein’s government, but all were cleared.

Like other big oil companies, Total has been under pressure from shareholders to cut costs and raise dividends as rising costs and weaker oil prices have squeezed profitability.

After struggling with production outages in Libya, Kazakhstan and Nigeria, it cut its oil output targets and said last month that it would step up asset sales.

It also said it would overhaul its approach to exploration after a “high-risk, high-reward” drilling strategy, launched two years ago and generally welcomed by industry experts, failed to discover any large deposits.

Russia’s Investigative Committee said it had opened a criminal investigation into the crash.

It said the driver had been found to be drunk, but that investigators were also examining the actions of the air traffic controllers and the flight crew. The driver’s lawyer said the driver had been following instructions from air traffic control, and that his relatives had said he never drank alcohol.

The airport, which is used by Putin and other government officials, said visibility had been down to 350 meters (1,150 feet) at the time of the crash.

Russia’s air safety record is patchy at best.

In December 2012, a Russian airliner flying without passengers broke into pieces after sliding off the runway upon landing and crashing onto a highway outside Vnukovo Airport, -killing four of the eight crew.

Additional reporting by Dmitry Zhdannikov, James Regan, Dominique Vidalon and Andrew Callus in Paris and Florance Tan in Singapore; Writing by Howard Goller and Dean Yates; Editing by Kevin Liffey

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