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UPDATE 10-Total CEO de Margerie killed in Moscow as jet hits snow plough

Tue, 21st Oct 2014 13:25

* Private jet collided with snow plough during takeoff

* Total's CEO a defender of Moscow's policies

* Insiders Boisseau and Pouyanne long seen as potentialsuccessors

* Russian investigators say snow plough driver was drunk (Edits throughout)

By Vladimir Soldatkin and James Regan

MOSCOW/PARIS, Oct 21 (Reuters) - Christophe de Margerie, thecharismatic and outspoken chief executive of the French oilcompany Total, was killed when his private jet hit asnow plough as it was taking off from Moscow's Vnukovo airporton Monday night.

His death leaves a void at the top of one of the world'sbiggest listed oil firms at a difficult time for the industry asoil prices fall and state-backed competitors keep them out ofsome of the best oil exploration territory.

De Margerie, 63, was a strong opponent of Western economicsanctions against Russia over its actions in Ukraine, and hadbeen attending a meeting on foreign investment with around 30other foreign executives at Russian Prime Minister DmitryMedvedev's country residence in Gorki near Moscow.

The crash occurred around midnight Moscow time as hisDassault Falcon was taking off for Paris in poor visibility. Theplane's three crew were also killed, but television footageshowed the snowplough driver seemingly unhurt.

Total is France's second-biggest listed company, with amarket value of 102 billion euros ($130 billion) that makes itthe fourth largest Western oil company, behind Exxon,Royal Dutch Shell and Chevron.

In a brief news conference on Tuesday, Total'ssecretary-general, Jean-Jacques Guilbaud, said its governancecommittee and board would meet "as soon as possible".

"Total will keep going," he said. "The group is organised toensure the continuity of its governance."

With his distinctive bushy moustache and outspoken manner,de Margerie was one of the most recognisable of oil executivesand a personal friend of French President Francois Hollande.

Prime Minister Manuel Valls said France had lost "anextraordinary business leader who turned Total into a worldgiant".

Ben van Beurden, chief executive of Total's rival RoyalDutch Shell, said de Margerie had been "a larger than lifecharacter, a leader respected across the energy industry and afriend".

De Margerie ran Total's exploration and production divisionbefore becoming CEO in 2007, but only took full control with theadditional role of chairman in May 2010.

Known inside the company as "The Big Moustache", he said inJuly that he should be judged on the new projects launched onhis watch, including a string of African fields.

He also said then that Total, which has not announced anyofficial succession plan, would name a successor from within.

POTENTIAL SUCCESSORS

Philippe Boisseau, head of Total's renewable energydivision, and Patrick Pouyanne, who was charged with reducingexposure to unprofitable European refining sectors, have longbeen seen as potential successors.

By 1320 GMT, Total's share was up 2.6 percent at 44.05euros, broadly in line with other European majors such as Shelland BP.

Barclays France director Franklin Pichard said de Margerie'sdeath "shouldn't trigger insurmountable managementdifficulties".

Ion-Marc Valahu, fund manager at Swiss investment firmClairinvest, agreed. "I think the Total management is prettystrong," he said. "The board has been there for a long time."

De Margerie was a staunch defender of Russia and its energypolicies, as the conflict in Ukraine has raised tensions withthe West to levels not seen since the Cold War, and triggeredeconomic sanctions against Moscow.

Total is one of the biggest foreign investors in Russia,where its output is due to double by 2020.

De Margerie told Reuters in July that Europe should stopthinking about cutting its dependence on Russian gas and focusinstead on making those deliveries safer.

He said tensions between the West and Russia were pushingMoscow closer to China, as illustrated by a $400 billion deal tosupply Beijing with gas that was clinched in May.

"Are we going to build a new Berlin Wall?" he said. "Russia is a partner and we shouldn't waste time protectingourselves from a neighbour ... What we are looking to do is notto be too dependent on any country, no matter which. Not fromRussia, which has saved us on numerous occasions."

Russian President Vladimir Putin sent condolences, praisingde Margerie's commitment to Russian-French relations.

Total said last month that sanctions would not stop itworking on the Yamal project, a $27 billion joint venture to tapvast natural gas reserves in northwest Siberia that aims todouble Russia's stake in the fast-growing market for liquefiednatural gas. De Margerie said then that Europe could not livewithout Russian gas, and that there was no reason to do so.

Russia accounted for about 9 percent of Total's oil and gasoutput in 2013. The firm said in April that Russia would becomeits biggest source of oil and gas by 2020 due to Yamal, and itspartnership with the Russian energy company Novatek.

De Margerie also worked to ensure that Total would be inpole position to return to Iran if Western economic sanctionsthere were lifted.

However, Total's dealings with Iran and Iraq in the 1990sdogged de Margerie's tenure. Last year, the firm agreed to pay$398 million to settle U.S. criminal and civil allegations thatit had paid bribes to win oil and gas contracts in Iran.

A French prosecutor still recommended last year that Totaland de Margerie himself be tried for corruption linked to theU.N. oil-for-food programme in Iraq, in which $1.8 billionflowed illicitly to Saddam Hussein's government, but the firmand de Margerie were subsequently cleared.

Like other big oil companies, Total has been under pressurefrom shareholders to cut costs and raise dividends as risingcosts and weaker oil prices have squeezed profitability.

After struggling with production outages in Libya,Kazakhstan and Nigeria, it cut its oil output targets and saidlast month that it would step up asset sales.

It also said it would overhaul its approach to explorationafter a "high-risk, high-reward" drilling strategy, launched twoyears ago and generally welcomed by industry experts, failed todiscover any large deposits.

Russia's Investigative Committee said it had opened acriminal investigation into the crash.

It said the driver had been found to be drunk, but thatinvestigators were also examining the actions of the air trafficcontrollers and the flight crew. The driver's lawyer said thedriver had been following instructions from air traffic control,and that his relatives had said he never drank alcohol.

The airport, which is used by Putin and other governmentofficials, said visibility had been down to 350 metres (1,150feet) at the time of the crash.

Russia's air safety record is patchy at best.

In December 2012, a Russian airliner flying withoutpassengers broke into pieces after sliding off the runway uponlanding and crashing onto a highway outside Vnukovo Airport,-killing four of the eight crew. (1 US dollar = 0.7836 euro) (Additional reporting by Dmitry Zhdannikov, James Regan,Dominique Vidalon and Andrew Callus in Paris and Florance Tan inSingapore; Writing by Howard Goller and Dean Yates; Editing byKevin Liffey)

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