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President and CEO of Talisman Energy, John Manzoni, addresses the media following the company's annual meeting in Calgary, Wednesday, May 5, 2010. THE CANADIAN PRESS/Jeff McIntosh (Jeff McIntosh/THE CANADIAN PRESS)
President and CEO of Talisman Energy, John Manzoni, addresses the media following the company's annual meeting in Calgary, Wednesday, May 5, 2010. THE CANADIAN PRESS/Jeff McIntosh (Jeff McIntosh/THE CANADIAN PRESS)

Streetwise

Talisman's Manzoni turns tables on BP Add to ...

When BP Plc picked Tony Hayward to become CEO in January of 2007, a disappointed executive named John Manzoni started looking for a new place.

Mr. Manzoni had spent 24 years at BP, rising to head of refining at the oil producer, but he lost the horserace for the top job.

He ended up moving to Talisman Energy Inc., and suddenly he's on the other end of Tony Hayward's misfortune. BP is shedding assets to underwrite the bills from its disastrous Gulf of Mexico oil spill, and Talisman stepped up Tuesday to pay $858-million for a 49 per cent stake in BP's Colombian operations.

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Mr. Manzoni had his share of pain at BP. He came under criticism for BP's management of U.S. refinery safety after an explosion at a Texas refinery that killed 15 people. An internal investigation found Mr. Manzoni didn't pay enough attention to warning signals, though the report didn't recommend that he be fired, as it did other executives.

Since joining Talisman, which was created out of BP's Canadian unit in 1992, Mr. Manzoni has totally turned around the company's strategy.

Under his predecessor, Jim Buckee, the general sense of Talisman's strategy was basically that nobody really had a sense of Talisman's strategy. Mr. Buckee was regarded as one of the smartest guys in the oil business, but that didn't always translate into performance at Talisman.

There was a huge reliance on North Sea assets, and some growth forays that didn't work out, including one in the Sudan that many investors hated.

The answer is now clear. Under Mr. Manzoni, Talisman is growing, piling money into new exploration.

About $5-billion of asset sales have enabled the company to reinvest in growth plays, and take on deals like the BP sale. The company owes less, with net debt down to $1.8-billion as of the end of March, half what it was the year before.

The company said earlier this year that it expects underlying growth in production starting in the third quarter. Production should increase as much as 10 per cent next year, Talisman said.

The BP deal may add to that. Talismans are supposed to be lucky. Maybe the company is finally living up to its name.

Follow on Twitter: @boyderman

 

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