With the death of Christophe de Margerie, the energy industry has lost one of its most influential and colourful personalities – a man who was renowned for his often contrarian views on oil markets and the geopolitics of Big Oil.
Nicknamed the “Big Moustache” for his distinctive facial hair and larger-than-life presence, de Margerie was a charismatic oilman whose often iconoclastic speeches at global energy conferences always drew capacity crowds. He developed close relations with Gulf potentates, Opec decision makers and western oil ministers: at industry gatherings, he would often regale fellow oilmen and journalists with stories from his long career into the small hours, a glass of his favourite Lagavulin whisky in his hand – or perhaps vodka, if in Russia.
But the Total chief executive was also known for his strong opinions. “His great strength was his independent thought,” says Tony Hayward, the former CEO of BP and a close friend. “He was not easily swayed by public opinion, and was never one of the herd.”
That was reflected in his views that energy companies should be allowed to drill anywhere to find oil – even if that got them into trouble with western governments. He often criticised sanctions against countries such as Iran and Russia, saying they would boomerang against the west by crimping future oil supply. In recent months, he accused the US and Europe of trying to isolate Moscow.
But he also was not afraid to criticise fellow oil companies. Two years ago, he spoke out against oil exploration in the offshore Arctic, saying it was too risky – a view that didn’t go down well with rivals such as Royal Dutch Shell, which at the time was trying to launch a major oil project in the waters off Alaska.
The Total chief executive was a regular confidant of French presidents and prime ministers, whichever party was in power – though his relationship with the former centre-right head of state Nicolas Sarkozy was infamously difficult. As one of the regular “visiteurs du soir” at the Elysée Palace, he gave advice on legislation affecting business, or even foreign policy.
His timekeeping could be erratic, even for meetings with high-ranking dignitaries. One story has him arriving hours late for an influential Saudi contact. On entering the meeting de Margerie threw himself to the floor prostrate until his host showed signs of forgiveness.
“He was always witty even in very serious and tense moments,” says Randa Takieddine, the Paris correspondent of Arabic newspaper Al Hayat, who for many years followed the oil executive on his frequent Middle Eastern trips.
Born in 1951, de Margerie was a member of the Taittinger family, founders of the champagne house. But he preferred a career in oil to the refined atmosphere of fine wines.
Unlike most of the French elite that run the country’s blue-chip companies he was not a graduate of one of the grandes écoles – the exclusive higher education hothouses for political and business leaders. After leaving the more modest École supérieure de Commerce business school in Paris, he joined Total in 1974, initially taking roles in corporate finance and becoming corporate treasurer in 1987. For years he managed Total’s Middle East business, and after its merger with Petrofina in June 1999 he became head of exploration and production and joined the executive committee. He took the top managerial role at Total in 2007.
De Margerie replaced Thierry Desmarest, the chief executive who turned Total into the world’s fourth-largest oil company by acquiring Petrofina of Belgium and Elf Aquitaine of France.
His arrival marked a substantive and important shift in the company’s culture, say people who worked closely with him. Mr Desmarest was aloof and guarded, and rarely shared as much as a hello with colleagues, says one person, whereas de Margerie’s management style was more inclusive. “Christophe . . . was the more friendly, more open face of Total,” adds this person. “When something happened he threw people he trusted into it. That is why the merger [with Petrofina and Elf Aquitaine] worked.”
It was an approach that also worked as Total sought to expand beyond its traditional focus on west Africa and the North Sea. De Margerie led Total’s push into countries such as Australia, Canada and Russia, where it is partnering Novatek in the vast Yamal liquefied natural gas project.
Underlying that drive to diversify was a fundamental belief in the upward trajectory of oil prices, which provided the economic justification for Total’s entry into extremely expensive, technically complex areas such as Canadian oil sands. But the strategy was based on a sceptical view of the oil industry’s ability to meet future demand – a view that set him apart from many of his peers.
The difference broke out into the open in 2007, after the International Energy Agency predicted that global oil production would grow to as much as 120m barrels a day by 2030. De Margerie dismissed that forecast, saying 2030 output of even 100m b/d would be hard to achieve.
It was a view that became increasingly controversial in the ensuing years, as the shale revolution led to far more optimistic assessments of future supply and the whole concept of “peak oil” became discredited.
But while his opinions on price and supply may have been contentious, in other respects de Margerie led the field. He was one of the first to notice in 2013 that investors were losing patience with the oil majors’ low returns and high spending, and so in July that year announced a big change in strategy. Total’s capital expenditure, he said, would peak that year and start falling in 2014, while cash flow from its big project start-ups would increase. It was just the message shareholders wanted to hear. Over the following 12 months Total’s shares rose roughly 45 per cent.
Others quickly followed suit, and soon all the big integrated oil companies were announcing greater capital discipline. “Everybody else fell in behind him,” says Iain Reid, an analyst at BMO Capital Markets. In perhaps the most striking admission of de Margerie’s success in turning round market sentiment towards Total, ExxonMobil started referring to the company as a peer in its analyst presentations last April.
But his career was also marked by scandals, largely linked to Total’s dealings with Iraq and Iran during the 1990s. He was tried last year for corruption tied to the UN oil-for-food programme in Iraq, but was cleared.
Also last year, Total agreed to pay $398m to settle US criminal and civil allegations that it paid bribes to secure oil and gas contracts in Iran, in a case that was jointly pursued by US and French law enforcement agencies.
In the opinion of fellow oilmen, however, his reputation was more positive. Mr Hayward recalls that de Margerie stood by him during the Deepwater Horizon crisis of 2010, when the former BP chief executive cut a lonely figure in the oil industry: “He had a wonderful kindness of human spirit.”
De Margerie is survived by his wife, along with a son and two daughters.
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