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New Delhi, INDIA: Senior Vice President and Managing Director of Multimedia services at NTT DoCoMo Inc. Takeshi Natsuno (R) shakes hands with Managing Director of Hutchison Essar Mobile, Asim Ghosh in front of a Japan's Darum doll during a launch function in New Delhi, 15 December 2006. (RAVEENDRAN/AFP/Getty Images)
New Delhi, INDIA: Senior Vice President and Managing Director of Multimedia services at NTT DoCoMo Inc. Takeshi Natsuno (R) shakes hands with Managing Director of Hutchison Essar Mobile, Asim Ghosh in front of a Japan's Darum doll during a launch function in New Delhi, 15 December 2006. (RAVEENDRAN/AFP/Getty Images)

Corporate Strategy

New Husky CEO tasked with turnaround Add to ...

When he was still leader of India's second-biggest telecom company, employees would see Asim Ghosh leap the stairs two at a time at Vodafone Essar Ltd.'s Mumbai headquarters.

Mr. Ghosh, 62, is not a tall man, and the climb to his second-floor office involved a series of energetic jumps. It was, to those who watched, a sign of the vigour that Mr. Ghosh carried into his retirement, which he officially began last year.

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The retirement didn't last long.

Husky Energy named Mr. Ghosh its new chief executive officer Friday, capping several months of speculation that erupted after then-CEO John Lau announced his own retirement in February.

For Husky, it is the first change at the top since 1993, when Mr. Lau, also then an energy outsider, was brought in by Li Ka-shing, the Hong Kong billionaire who owns a controlling interest in Husky through conglomerate Hutchison Whampoa Ltd.

For Mr. Ghosh, who begins June 1, it will be a test of how much energy he still possesses. He enters a company that has seen major earnings growth over the past decade, but whose production and stock price have languished in recent years.

Husky's daily production in 2009, at just over 300,000 barrels, barely exceeded its output in 2002, and analysts expect the number to decline another 5 per cent this year - with no prospects for growth until 2014.

Since going public a decade ago, Husky has made little progress on its reserves - the amount of oil it has still in the ground - which are at virtually the same level today as they were in 2001. The company has not completed a major acquisition since 2003, when it bought Marathon Canada Ltd. for $588-million (U.S.) It has struggled with production problems at its Tucker oil sands project, which is flowing at a fraction of the number of barrels expected.

And investors seem to have lost some faith. While shares at other energy companies have recovered in the past year, Husky today trades below levels seen in December, 2008, in the depths of the economic crisis, when oil was worth substantially less than it is today.

Mr. Ghosh wasn't available for comment. But Husky says he has been tasked with a turnaround.

"He has a clear mandate to grow the company, to take it to the next level," Husky spokesman Graham White said.

But some are skeptical that Mr. Ghosh, a long-time Li Ka-shing protégé who joined the Husky board last year, can reinvigorate a company whose controlling shareholder is unlikely to change.

"To me it just reeks of the status quo," said Dennis da Silva of Toronto-based Middlefield Capital Corp. "You have an insider becoming the CEO. So to me, really nothing changes."

Mr. Ghosh is seen as a gentler alternative to Mr. Lau's tough leadership style. But he faces the obstacle of entering a line of work he has little background in - even if Canada is not new territory for him.

A Wharton MBA graduate, he began his career with Procter & Gamble in Toronto before becoming a senior vice-president at Carling O'Keefe. He moved overseas to become the founding CEO at Pepsico Foods in India, before spending nearly two decades working for subsidiaries of Hutchison Whampoa, which is controlled by Mr. Li.

His most recent assignment was with Hutchison Essar, which became Vodafone Essar in 2007, when Mr. Li sold off his 67-per-cent interest. In his 11 years leading that company, Mr. Ghosh oversaw growth in the number of subscribers to 68 million from 100,000, and played a key role in changing Indian telecom policies to speed wireless adoption.

Husky pointed to that experience as evidence that he is well-suited for his new position - and argued that telecom has been good training for oil and gas.

"Both industries rely on new technologies and capital investment. Both industries have the potential for dramatic growth, and he's established himself very well with proven success at growing companies," Mr. White said.

Still, Mr. da Silva said, it may be harder to increase oil production in the relatively mature energy industry than it was to increase phone subscribers in a telecom sector experiencing explosive expansion.

Other shareholders, however, are optimistic Mr. Ghosh's appointment will bring about something they have not seen for some time.

"I do expect and hope that the share price will rise," said Tim Regan, the managing director of Kingwest & Company, a Toronto-based shareholder.

Follow on Twitter: @nvanderklippe

 
Security Price Change
HSE-T Husky Energy 31.85 -1.01
-3.074 %
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