BG seeks "fresh leadership" as CEO resigns

Oil and gas company BG Group announced on Monday that its chief executive, Chris Finlayson, has resigned with immediate effect.

Chairman Andrew Gould will take Finlayson's place as interim executive chairman until a recruitment process finds an external successor.

Gould said in a company statement: "The company must accelerate the creation and delivery of the longer-term value for our shareholders, while delivering the group's business plans. The board felt that it was in the best interests of the group to accept Chris' resignation and seek fresh leadership to deliver both of these priorities."

Finlayson was recruited by the charismatic former BG boss Sir Frank Chapman in 2010 after more than 30 years at Royal Dutch Shell, where he had significant operational experience with trouble spots such as the Niger delta and the Sakhalin gas project in Russia.

The well-liked industry veteran, who will not receive any payment beyond his contractual entitlement, was only 15 months into the job. When he took over there was a clear intention by the board to get cracking in bringing assets in Australia and offshore Brazil into production.

However, heavy dependence on major ventures in places like Brazil made the company's business model vulnerable to project deferrals and delays, which have forced it to cut back production guidance.

Today's statement said good progress continues in its Australian operation, with the start up of the Ruby Jo central processing plant, and in Brazil, where all four buoyancy-supported risers are in position on FPSOs 2 and 3 with two new permanent wells connected. The commissioning of Bongkot South Phase 4b was also completed in February.

The bigger trouble spot is Egypt where volumes in the first quarter declined 35% from the previous quarter to 66,000 barrels of oil equivalent per day, as a result of deteriorating reservoir performance and the high level of diversions to the domestic market, where the group is entitled to a lower share of production.

Finlayson's style was very different to Sir Frank's hierarchical style. One of the first things he did on taking over was to sell the company plane primarily in operation for the chief executive's own convenience.

Such a large organisation is much bigger than its lead executive however, and the shares shrugged off the news, dropping just 1.2% to 1,132p.