Total loss

Europe Loses an Industry Titan

Total-CEO-Christophe-de-Margerie-Source-Bloomberg-Jan-2014-during-World-Economic-Forum-Davos-CH
Christophe de Margerie had been Total chief executive since 2007.
  • Why it matters

    Why it matters

    The death of Christophe de Margerie will set off a succession at the top of one of France’s and Europe’s most powerful companies.

  • Facts

    Facts

    • Christophe de Margerie had been chief executive at Total since 2007.
    • Russia accounted for 9 percent of Total’s output in 2013.
    • Possible successors are senior Total executives Philippe Boisseau and Patrick Pouyanne.
  • Audio

    Audio

  • Pdf

It was a major loss for European industry.

Late on Monday, Christophe de Margerie, the irascible, eloquent chief executive of French oil giant Total, was killed in a runway accident at a Moscow airport. Mr. de Margerie and three crew members on his executive jet died after their plane collided with a snow plough while attempting to take off.

The accident is likely to reverberate through Total, French industry and Europe’s oil and gas sector.

Mr. de Margerie had navigated the choppy, multinational waters of the global energy business to transform Paris-based Total into the fourth-largest energy company, and one of the world’s 20 largest corporations. A French standard bearer, Total is the country’s second-largest firm after BNP Paribas.

The charismatic Mr. de Margerie never shied from controversy and had been a vocal defender of Russia in its ongoing sanctions battle with the West over the Ukraine. An aggressive expansionist, Mr. de Margerie had constantly pushed Total into new and lucrative markets.

The 63-year-old became Total chief executive in 2007, reaching the top of a company where he had worked his entire career. He graduated from the elite École Supériere de Commerce business school in Paris and started work at Total in 1974 during the height of the oil crisis. He became head of Total’s Middle East division in 1995 and was responsible for exploration and production from 2002.

His fulsome bristle moustache was a personal trademark, earning him the nickname “Big Moustache,” which fit his outspoken and gregarious nature. He came from a privileged family of diplomats and entrepreneurs, and his maternal grandfather founded Taittinger Champagne.

Mr. de Margerie was one of the first proponents of “peak oil,” the idea that the world’s supply of oil is limited and will one day run out. This belief drove him frequently to leave Total’s headquarters in Paris’ La Defense western business district in search of new energy opportunities.

He was a committed networker, and a global business leader who embodied the joie de vivre ideal.

“Nothing replaces human warmth and a handshake,” he once said. “You never reach a deal by telephone.”

His intense personal drive and commitment led him to explore new energy opportunities in far-flung corners of the world such as Iraqi Kurdistan, French Guiana, Tajikistan and Angola.

His favorite locale for deals was Russia, and Mr. de Margerie became a big defender of Moscow in the Ukraine conflict. In July, he told Reuters that Europe should stop thinking about cutting its dependence on Russia and instead focusing on making deliveries safer.

“Are we going to build a new Berlin Wall?” he asked. “Russia is a partner and we shouldn’t waste time protecting ourselves from a neighbor.”

“France is losing a great industry captain and a patriot.”

Manuel Valls, , French prime minister

His stance was not surprising considering how much business Total has in Russia.  The country accounted for 9 percent of Total’s oil and gas output in 2013.

Total has a $27 billion joint natural gas venture with the Russian company Novatek and China’s CNPC to drill for gas in the Yamal peninsula in Siberia.

According to Russian media reports, Mr. de Margerie on Monday was returning from a meeting with the Russian prime minister, Dmitry Medvedev, to discuss foreign investment in Russia. His plane reportedly collided during takeoff with a runway snow-plough.

Reuters, citing Russian authorities, said the driver had been drinking and an investigation into the accident had been opened.

The Kremlin on Tuesday published a telegram Russian President Vladimir Putin had sent to the French president, Francoise Hollande, expressing his condolences.

“In Christophe de Margerie, we lost a real friend of our country, whom we will remember with the greatest warmth,” Mr. Putin wrote.

Hours after the accident, the French company was reeling from the sudden loss of its chief executive.

“In Christophe de Margerie we are losing a great friend of Germany,” Hans-Christian Gützkow, chief financial officer at Total Germany,  told Handelsblatt Global Edition. “He was always committed to Franco-German relations and the German branch of the company. The thoughts of management and the employees are with the de Margerie family as well as with the family members of the victims.”

Plane crashes at Vnukovo airport
Moscow’s Vnukovo Airport. Source: DPA

 

Total’s board of directors is expected to meet soon in Paris to name a successor, who is likely to come from inside the company. Possible replacements are Philippe Boisseau, who heads Total’s new energy division, and Patrick Pouyanne, president of its refining and chemicals division.

“Obviously, there is a question mark over succession at the company,” said Mark Henderson, a London-based analyst at Westhouse Securities. “But a lot of the work he did over 15 years as a CEO is well embedded in the company.”

According to Mr. Henderson, there might be uncertainty in the short term affecting Total’s stock price but over the long run, this is something that can be managed by the company.

While Mr. de Margerie was respected in the world of business and politics, his career was not all plain sailing.

In May 2013, Total paid $398 million to settle U.S. allegations that its employees had bribed an Iranian official. French prosecutors had recommended charges against Mr. de Margerie himself, but these were dropped.

In July 2013, a French court cleared Total, Mr. de Margerie and five former employees of charges that they unlawfully did business with former Iraqi dictator Saddam Hussein.

“He not only was an eloquent spokesman for Total but for France as well.”

Hans-Jürgen Jakobs, Handelsblatt editor in chief

In France, leading decision makers expressed their shock and condolences.

The former prime minister, Jean-Pierre Raffarin, tweeted: “Christophe de Margerie, a deep man, whose humor was a key to that depth. The pain is just as deep.”

“France is losing an extraordinary business leader, who turned Total into a world giant,” Manuel Valls, the French prime minister, said. “France is losing a great industry captain and a patriot.”

The Frenchman’s drive and personality were appreciated across the Rhine too in Germany.

“He not only was an eloquent spokesman for Total but for France,’’ said Hans-Jürgen Jakobs, the Handelsblatt editor in chief who interviewed Mr. de Margerie on July 3 before 200 guests at a Handelsblatt dinner in Munich. “Wherever he appeared, he represented the interests of his company and his country. For him, they were one in the same.’’

Mr. Jakobs, who previously worked at Der Spiegel and the Süddeutsche Zeitung newspaper, said he had followed Mr. de Margerie’s rise through the French oil and gas company. He described the Total executive as a quick-witted advocate of European and French interests known for his forceful defense of the euro currency and frequent criticism of the influence of the U.S. dollar on European business.

At the Handelsblatt dinner in Munich, Mr. de Margerie charmed listeners with another command performance of European salesmanship and comraderie.  Asked about the importance of the euro currency to Europe’s political agenda and ideals, Mr. de Margerie minced no words.

“We must not forget how important the euro is for Europe as a whole,’’ Mr. de Margerie said. “Do you think we as France or Germany could stand up alone with our own currencies against the dollar or the Chinese yuan? Definitely not. We would be crazy if we tried to go it alone again.’’

Mr. Jakobs said France had lost one of its driving forces on the international scene.

“He was outspoken and unusually honest and straightforward,’’ Mr. Jakobs said. “One always knew where one stood with him. He was always willing to defend his business and his country. He was a true European.’’

Mr. de Margerie is survived by his wife and three children.

Born: August 6, 1951, Mareuil-sur-Lay-Dissais, Vendée, France. Died: October 20, 2014, Moscow, Russia.

 

Siobhán Dowling is an editor at Handelsblatt Global Edition in Berlin and covers politics and economics. Lára Hilmarsdóttir covers business and economics from Berlin. To contact the authors: dowling@handelsblatt.com, l.hilmarsdottir@vhb.de 

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!