Genel sale rumours heat up as chief executive Tony Hayward plans new role at company

Earlier this month, Tony Hayward said there was a fifty-fifty chance the company would be sold.

Tony Hayward, who runs Genel Energy, which has key assets in the Kurdish region of Iraq, is planning to move from chief executive to executive chairman – a shift that adds fuel to the talk that the company could be sold.

The news that the former head of BP plans to change his role, which was reported in London's Sunday Times, comes a few months after it was announced that the company's founding chief financial officer would be replaced by another banker who is well known in London energy finance circles.

In February, the company said that Julian Metherell, a former Goldman Sachs banker who with Mr Hayward and fellow banker Nathaniel Rothschild acquired Genel Energy in 2011, would be replaced by Ben Monaghan, an energy banker at JP Morgan “after a period of transition”, which has not been specified.

This month, in an interview with Bloomberg after the company’s annual results, Mr Hayward said there was a 50-50 chance the company would be sold.

“We either continue to grow or somebody comes along and makes our shareholders an offer they can’t refuse. I think either one is equally likely,” he said.

Mr Hayward said that “the company is strategically important for Iraqi Kurdistan. For anyone to acquire us, they clearly need to have the support of the regional government”.

Mr Hayward has not ruled out the possibility that Genel Energy might be a buyer of another company operating in the Kurdish region and has been linked to Gulf Keystone Resources, a London-listed company whose main asset is the Shaikan oilfield. Dragon Oil, which last month said it had a buyout approach – but no formal offer – from its largest shareholder, the Emirates National Oil Company in Dubai, could also be in the running.

The Gulf Keystone chief executive, John Gerstenlauer, said at the end of last year that once the Kurdistan Regional Government sorted out its arrears with companies “we should see a consolidation in the region”.

Companies operating in the region have been ramping up production even while the KRG is involved in fighting militants in the west of the region, as well as disputes that have limited their ability to pay the companies. Genel has raised production to about 100,000 barrels per day from about 70,000 bpd last year and 40,000 bpd in 2011, though profits were hit hard last year by the government's arrears and the fall in oil price.

The move by Mr Hayward to replace the current chairman, Rodney Chase, a former chief financial officer of BP, has been widely expected.

Mr Hayward came under pressure from UK financial watchdogs last year to relinquish an operational role at Genel Energy when he became chairman of giant commodities broker Glencore.

Mr Hayward, who was forced to step down as BP chief executive after the Macondo oil disaster in the Gulf of Mexico in 2010, stands to benefit financially if Genel Energy is acquired.

As with other senior management, Mr Hayward’s compensation is linked to the share price – about 30 per cent of his £2.5 million compensation last year, according to the annual report.

Although Genel Energy’s shares have halved in value since their peak last summer, they are up sharply since the start of the month – from 460 pence to 574 pence on Friday.

Follow The National's Business section on Twitter