Glencore Names Ex-BP CEO Hayward Chairman as Oil Assets Grow

May 08, 2014 3:57 am ET

(Updates with share price in fifth paragraph.)

May 8 (Bloomberg) -- Glencore Xstrata Plc appointed former BP Plc Chief Executive Officer Tony Hayward chairman as the mining company run by billionaire Ivan Glasenberg adds to its oil assets.

Hayward, 56, became interim chairman last year as the Baar, Switzerland-based company completed a $29 billion acquisition of Xstrata Plc and shareholders ousted then-interim Chairman John Bond. Glencore announced his permanent appointment today.

A member of Glencore’s board since its $10 billion initial public offering in April 2011, Hayward resigned from BP in October 2010 following the Gulf of Mexico oil spill earlier that year. Glencore, already among the world’s biggest crude oil traders, last month expanded its interests in oil production with the $1.35 billion takeover bid for Caracal Energy Inc., gaining assets in Chad.

Hayward’s “knowledge of the oil industry and his contacts will likely be very useful for Glencore over the coming years,” analysts at Nomura Holdings Inc. said today in an e-mailed note to clients.

Glencore advanced 0.7 percent to 325.5 pence by 8:41 a.m. in London trading, where the stock has gained 4 percent this year. The company has a market value of about 43 billion pounds ($73 billion).

Hayward plans to leave his position as CEO of Genel Energy Plc within a year or two, the U.K.’s Daily Telegraph newspaper reported earlier.

Kurdistan Oil

In 2011, Hayward teamed up with financier Nathaniel Rothschild to create Vallares Plc, a shell company that raised 1.33 billion pounds through an IPO in London. Vallares that year agreed to merge with Genel, the biggest oil and gas operator in Kurdistan.

Hayward stepped down at BP after 11 workers on the Deepwater Horizon oil platform died following the blowout of the Macondo well on April 20, 2010, which unleashed the worst offshore oil spill in U.S. history.

Glencore had been seeking a board leader for almost a year and committed to naming a new chairman by a May 20 shareholder meeting.

“With this hurdle cleared, the next challenge for Glencore’s board is that it is the only company in the FTSE 100 without female representation on the board,” Ben Davis, an analyst at Liberum Capital Ltd. in London who has a hold rating on the stock, said today.

‘Exemplary Leadership’

Glencore has previously signaled a focus on copper and oil investments, so Hayward’s appointment is unlikely to herald a significant shift in strategy, he said.

Mining company Antofagasta Plc hired Vivianne Blanlot to their board in March, leaving Glencore as the only company on the U.K.’s FTSE-100 with an all-male board.

“The appointment of a female board member is a significant consideration and our Nominations Committee is working to identify the right female candidates,” Glencore said in an e- mailed statement in March.

Hayward had in the past year “provided exemplary leadership of the board and proved himself to be the outstanding candidate to take on the role permanently,” Peter Grauer, chairman of Glencore’s nomination committee, said today in a statement. “We continue to look forward to harnessing his in- depth knowledge of the resources industry and of listed company governance.”

Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore Xstrata.