Route to the top- Cairn Energy CFO

I think I was part of the last generation of graduates that were not particularly career-focused when they were undergraduates. I graduated from Oxford University in English. I thought going to Oxford meant that career decisions would come later to me.

I harboured an ambition to be a professional musician, as I was a keen pianist. I interviewed to study music and to go to the Conservatoire in Paris, but I decided to keep my options open. I knew people who had gone into careers in the City and prospered, although it is an incredibly intensive and exhausting environment.

I went into banking slightly blind but with the knowledge that it was a fantastic training ground for a financial career and a chance to learn about the corporate world. I joined ABN Amro, on the oil and gas side, after an internship during my penultimate Summer at university and managed to turn that into a job offer when I left.

The oil and gas industry seemed deeply unfashionable at the time because everyone wanted to work in the internet economy, as it was the height of the boom. But from the beginning I found the sector completely fascinating, especially regarding its onus on capital intensity and risk-taking. There are not many other industries like it where the value of the business gets re-invested every year.

There’s also the geopolitical interest. We invest in interesting and sometimes challenging parts of the world, particularly in emerging markets, and that for me has been hugely interesting.

I got a great education working for some of the oil majors– ENI, BP and others, as well as state oil companies. But I enjoyed working with the exploration & production (E&P) companies the most because they typically are nimbler, more dynamic risk-takers, and tend to have more constant change. Many were start-up AIM-listed companies that were able to raise funds in order to back themselves.

I moved to a specialist oil and gas house called Harrison Lovegrove that specialised in advising mid-market E&P firms. It allowed me to build up a technical understanding of how the industry works, including the valuing of businesses and assets. You get much more into the weeds at an asset operational level at a firm like that.

Then I thought it would be good to advance my career by moving into having a more influential role in corporate level transactions, so I went to investment bank Merrill Lynch. It was a great time to move, as it was a real boom time for our industry in 2004-5 with high sector valuation. There was lots of M&A activity, capital raising and commodity hedging. I was a well-ranked member of a successful team, so it was a good part of my career.

It was the time I began my long-standing relationship with Cairn Energy, which the following year undertook an IPO of its Indian business. At the time it was the biggest IPO there had been in India. Merrill Lynch was a book-runner for Cairn for the Indian IPO, so I travelled out to Rajasthan in the north-west of the country to see the discoveries and where the infrastructure investment was going to be. It was an important time for building a relationship with Cairn because it was a big moment for them.

My boss at Merrill Lynch Rahul Dhir became the CEO of Cairn India, which was a bit of a surprise. I was working on the IPO under him and then it was suddenly announced he was going to be the chief executive of the firm.

The IPO proved to be quite complex. The discoveries were in the middle of the Rajasthan desert. Contractually the government was required to create the infrastructure to offtake the oil discovery. But it became clear that in order to commercialise the project with any degree of swiftness, Cairn was going to have to build a heated pipeline across 500km of desert and effectively finance it, recouping the cost once it was up and running.

As Merrill Lynch was both a bookrunner and underwriter for the IPO, a year of preparation was required, including a fundraising, which Malaysian state oil company Petronas came in on as an investor. The formal IPO process began at the beginning of 2007, in slightly wobbly markets. It was a good example of being completely immersed in the corporate complexity of getting a major deal done.

I moved to advisory firm Rothschild after Merrill Lynch was taken over by Bank of America (BoA) following the financial crisis. In that climate there was a lot of uncertainty and challenges in terms of BoA’s ability to raise capital. Rothschild offered something different, as it only provides advice to clients-and is not a provider of capital. It also had a great relationship with Cairn.

The opportunity to join Cairn came when my predecessor Jann Brown decided to move on. As I knew the management team well, having spent plenty of time with them. I was keen for them to consider me as CFO for the next stage of their journey.

Comments are closed.