Nexen's new CEO says: Nexen the former Canadian Occidental Petroleum is going to have a new CEO. His comments are being watched by the media. So what does this have to do with Cantex? As some of you may know Nexen has some major operations in ... Yemen. Now how does the new CEO view the fact that he has major operating funds tied up in this far off foreign country - which Falconbridge views as to dangerous? Well se for yourself in the Globe and mail article below.
Nexen's new chief not craving takeover
By DAVID PARKINSON From Tuesday's Globe and Mail Calgary — The Canadian oil patch is in an overpriced takeover feeding frenzy and could suffer from indigestion down the road, Nexen Inc.'s new top executive said Monday. "We're concerned that we're at the top of the commodity cycle, and the prices being paid today are extremely high relative to ultimate value," Charles Fischer said in an interview with The Globe and Mail. "In some cases, these transactions are going to lead to future writeoffs. We don't want to put ourselves in that kind of position." Nexen, a Calgary-based senior oil and gas company, announced at its annual meeting last week that Mr. Fischer would succeed retiring president and chief executive officer Victor Zaleschuk, effective June 1. Mr. Fischer has been a key part of the company's successful management team under Mr. Zaleschuk, serving as chief operating officer for the past four years. Mr. Fischer said Nexen isn't averse to acquisitions, but it won't jump in with both feet just because the industry is on a consolidation kick. "If we found the right deal, we would do it," he said. "But the right deal for us is a deal that, looking at full cycle, has huge opportunities going forward to add more production and more reserves at low cost. "The trick is to find the right deal at the right time at the right price. You've got to be patient." Nexen, which was called Canadian Occidental Petroleum Ltd. until last fall, is in an enviable position of having plenty of growth opportunities with its existing assets, including those in the Gulf of Mexico, Yemen, Colombia, Nigeria and its base in Western Canada. "We've got to get as much out of our existing assets as possible. That's where we create value in the short term for shareholders," he said. "We see pretty steady growth in the 6- to 8-per-cent-per-year range, just by investing in those assets. Medium term, we have some absolutely outstanding opportunities in the Gulf of Mexico. In addition, my view is we have a strategic advantage in Yemen." Mr. Fischer is still more than three weeks away from taking control of Nexen's corporate reins, but he's already showing signs that he will be more active than Mr. Zaleschuk in courting the investment community. He kicked off the week holding meetings with Calgary-based oil and gas analysts, and will take his show on the road later this week when he visits analysts in Toronto and Montreal. "I have to make sure that our investors and potential investors understand who Nexen is, what we're doing, what the opportunities are compared with our competitors," Mr. Fischer said. "Particularly early on here, I think it's important for people to meet me face to face, ask whatever questions they have, and really understand what our priorities are." Shareholders will be looking for Mr. Fischer to help lift the company's stock price, which remains undervalued relative to its peer group in North America, partly because of the company's emphasis on oil production over the market's current darling, natural gas. Mr. Fischer said he sees the tide eventually turning back toward oil producers. "Our view is that gas has enjoyed a tremendous surge in the short term. But in the medium term, we believe that the market is rational, and that gas prices and oil prices are going to tend to the same level," he said. Mr. Fischer and Mr. Zaleschuk have worked closely together in Nexen's executive offices over the past four years, and most observers don't expect the change in command will mean much of a shift in company focus. Still, there's little doubt that Mr. Fischer's promotion brings a different type of personality to the forefront of the company. Mr. Zaleschuk, an accountant with a strong background in finance, was a quiet, low-key leader. Mr. Fischer, with his distinctive handlebar moustache and permanent smile, is an engineer with strong experience in operations, and brings a more outgoing style to the CEO's office. Mr. Fischer played down the differences in styles and backgrounds between himself and Mr. Zaleschuk. "A company is not one person. A company is a team of folks working together," he said. "Under Vic's leadership, we had a strong team, and we have a strong team going forward. We have minimized the number of changes. "My job is to bring all of these people together. It's not to try and make all of the decisions myself. It's to make sure that we're bringing the knowledge together from around the world, bringing the thoughts together in making decisions that are in the best interests over all." Mr. Fischer's only previous experience as a CEO came with the short-lived Encor Inc., the oil and gas spinoff of TransCanada PipeLines Ltd., that went public in 1989 and was bought out by Talisman Energy Inc. in 1993. He said he hasn't forgotten the hard lessons that he learned during his reign at Encor. "We got spun out as a public entity with a very high debt-to-cash-flow ratio, in a world where we were seeing falling prices," Mr. Fischer said. "I learned the harsh realities of a commodity business where prices go down as well as up. "I learned how to build a strong team in the face of adversity, and to be very strategic in the way I thought and the way that we positioned to take actions."
Most interesting comment "my view is we have a strategic advantage in Yemen". Not something you would expect to be said about a "dangerous " country to do business with. Could Nexen know how to deal with differing cultures better than Falconbridge? You be the judge.
By the way great parting shot SirT.
P10