Nexen Inc. , one of Canada's largest oil and gas companies, shook up its top executive ranks late Monday, naming a new chief executive.
Marvin Romanow is no longer Nexen's CEO and president, the company said in a surprise statement. He is leaving the company "effective immediately." Kevin Reinhart, Nexen's chief financial officer and executive vice president, has been tapped as the interim president and CEO.
Nexen's statement did not say why Mr. Romanow has left the company. The oil and gas outfit is searching for a new CEO, it said.
"Marvin has made a valuable contribution to Nexen during his 13 years with the company," the statement said. "The board thanks him for his contributions and wishes him well in his future endeavours," said Francis Saville, the board's chair. "Kevin has been with the company for over 17 years and he has the full support of the board in his new role."
Nexen's executive vice president of Canada, Gary Nieuwenburg, is also leaving immediately. Nexen would not comment Monday evening.
The Calgary-based company's stock closed at $17.07 per share on the Toronto Stock Exchange Monday, before Nexen released its announcement. By comparison, the company closed at $21.60 per share, after adjusting for dividends and stock splits, this time last year. Meanwhile, West Texas Intermediate crude, the North American benchmark, is trading around $100 (U.S.) per barrel now, while it went for about $90 per barrel in early Jan. 2011. The European benchmark is worth over $110 per barrel now, while it sold for about $95 per barrel a year ago.
Nexen has assets around the world, and its struggling Long Lake oil sands project turned many investors sour. Nexen admitted in early 2011 that the bitumen reservoir at Long Lake came with watery zones that were hampering production. The so-called "lean zones" make up 3 to 5 per cent of the reservoir, Nexen said in February. The announcement, however, came after years of missing production targets, budgets, and the market's expectations.
Further, Nexen was pushed out of a major oil field in Yemen in December after the government there did not renew its partnership deal. The Masila oil field made up about 9.5 per cent of the company's production after royalties in the third quarter. Mr. Romanow spoke with senior government officials in Yemen last month after the government nixed the partnership, but a new deal did not emerge.
Nexen is also developing an asset off the shore of Nigeria, which it is now counting on to replace its production out of Yemen. It also operates in the U.K.'s North Sea, the Gulf of Mexico, and other spots in western Canada.
In late November, Nexen struck two joint venture deals with Asian companies. It joined hands with China National Offshore Oil Corp. (CNOOC) on some of the Canadian company's properties in the Gulf of Mexico, where it produces about 20,000 barrels of oil equivalent per day; and struck a $700-million joint venture deal with Japan's Inpex Corp. on part of its Horn River shale gas play.
Nexen owns about 7 per cent of Syncrude Canada Ltd., the second-largest oil sands operation in Canada. The company controls 65 per cent of the Long Lake steam-assisted gravity drainage project, with CNOOC holding the remaining stake. (CNOOC bought OPTI Canada Inc. last year).
"Nexen is a strong company with a high quality suite of assets," Mr. Saville said. "We are committed to closing the value gap for our shareholders through execution of our oil sands, conventional offshore and unconventional gas strategies as outlined at the company's investor day in early December."