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Former BP CEO Tony Hayward (TOBY MELVILLE/REUTERS)
Former BP CEO Tony Hayward (TOBY MELVILLE/REUTERS)

Tony Hayward reaches for new heights Add to ...

It is a remarkable comeback by any standards. Nine months after leaving BP PLC as chief executive in the wake of the U.K. oil group's Gulf of Mexico spill, Tony Hayward returned to the corporate limelight this week.

The 54-year-old geologist announced a £1-billion ($1.6-billion U.S.) fundraising for an oil and gas venture called Vallares. Together with three other founders, including Nathaniel Rothschild, the financier, Mr. Hayward has committed £100-million to the venture that intends to target assets in emerging markets such as Russia, Kurdistan and China, as well as the Middle East, with an enterprise value of £3-billion to £8-billion.

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The model is based on Vallar, Mr. Rothschild's previous venture, which raised slightly more than £700-million in a listing on the London market last July and rapidly went on to buy two Indonesian coal producers.

The magic, says Mr. Hayward, is in the structure: Vallares will offer a private company with good quality assets "a short-cut" to a London listing.

"We bring capability, a very strong board and credibility," he says. The money raised during the listing will be used to invest in the company that is eventually acquired, which will then reverse into Vallares. The new entity will be run by Mr. Hayward who will also assemble an operations team.

Directors include oil industry veterans such as Rodney Chase, a former BP executive, and Sir Graham Hearne, the former chairman of Enterprise Oil. If Vallares cannot find a suitable asset within two years, the investors receive their money back.

So far, so straightforward.

Vallares has already garnered strong investor support from both sovereign wealth funds and long-only funds in London and New York. For Mr. Hayward, who says he expects the final make-up to be fairly "conventional," it is a vote of confidence after a year that saw his long career at BP come to an abrupt end in the wake of the Gulf of Mexico crisis.

After leaving BP in October, he took some time out "to think." The idea for Vallares stemmed from a conversation between him and Mr. Rothschild over Christmas. On Feb. 3 this year, he also successfully reached the summit of Mount Kilimanjaro for charity.

"It was undoubtedly the toughest thing I've done in the last 30 years and definitely a case of mind over body," he blogged at the time.

He has also taken up a non-executive board position at TNK-BP, BP's Russian joint venture, and become a non-executive director at Glencore, the commodities group that recently listed on the London market.

He may have become the most hated man in the U.S. at the height of the BP crisis, but it is clear he still enjoys strong support in the City and the industry and, if successful with Vallares, could make more money than he ever would have at BP.

Nevertheless, that success is not guaranteed. Mr. Hayward and his team will need to pick their target carefully. This week's crisis at ENRC, the London-listed Kazakh miner, underlines the pitfalls for investors when issues of corporate governance come to the fore. Mr. Hayward knows the oil and gas industry better than many - and will not want to endanger his comeback - so is likely to be well aware of the risks. He insists that Vallares is a long-term project and that his ambition is to build it into a FTSE 100 oil and gas exploration and production company.

"This is my executive role, my day job," he says in answer to a question on whether he will be assuming other rules. "I'm too young to go plural ... I don't want to become a board member of half a dozen entities," he adds.

 

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