Updated 1600, November 29
It seems to me that oil and gas company bosses are in danger of becoming the new “bankers”, taking salaries and bonuses that smack of rank greed.
Helge Lund may be a top flight guy, and I have met him on about three occasions, but that does not get him off the hook.
To remind, a spokesman for BG said the £13.5million part of the overall pay deal, which includes a £1.5million salary, was at the top end of Lund’s potential pay in the job.
The figure is more likely to be around £9million, the “median CEO package for the global oil and gas industry”, he added.
Cough, cough!
Readers of Energy Voice (and the Press & Journal) need hardly be reminded that oil prices have plummeted since June and were given an extra shove downwards this week by the still fresh Opec decision not to cut oil production quotas.
The North Sea is staring the $70 barrel in the face and the impacts are going to be enormous. Very negative.
As I wrote in my post OPEC talks commentary a couple of days ago, we’re in for tough times here in Aberdeen.
And no-one is going to have a jot of sympathy for Big Oil; even moreso given the bankers scale salaries that are being handed out at the top.
Of course, rank and file workers in the industry … all of whom are very well paid by anyone else’s standards but their own … will be asked, nay told, to take cuts.
That has in fact been going on for months within the North Sea oil & gas supply chain. And it’s going to get worse, with a lot of people being put out of work at this rate.
Life will of course get tougher in many other oil & gas provinces around the world, but the North Sea is especially vulnerable.
I utterly dislike business secretary Vince Cable, but on this occasion I applaud him for stepping in and urging BG shareholders to vote down Lund’s “golden” pay packet.
This kind of deal sends out all the wrong signals, even in good times.
And I want to see more of this kind of fat cat vigilance. That should include boardroom excesses among AIM-listed E&P companies that have never delivered shareholder value, and even if they have, they still need to watch their step.
Fat Cat, by the way, extends to the Oil & Gas Authority currently being formed. There’s a public notice just out inviting applications for the role of chairman. On offer is £100,000 a year for a 2.5-day week! This too is obscene when compared to what is offered to chairs and board members of public bodies, or indeed colleges where one is expected to offer one’s services for nowt.
Here’s an afterthought for Lund to consider.
If he is to get away with his obscene pay deal, then he should give 50% of it to charity; Children in Need for example. But it will have to be done without fuss or PR. And I would require proof that it was done.
Jeremy Cresswell is the Press and Journal’s energy editor.
