UPDATE 1-Gulf Keystone hires ex-Glencore Murray as chairman

Thu Jul 4, 2013 10:08am EDT

* Todd Kozel had held chairman and chief executive roles

* Move seen as helping ease corporate governance concerns

By Sarah Young

LONDON, July 4 (Reuters) - Gulf Keystone has hired city heavyweight, Simon Murray, as chairman, in a move analysts see as helping to calm investor concerns over corporate governance before listing on London's main market.

M&G Investment Management - Gulf Keystone's biggest shareholder with a 5.7 percent stake - wants four new directors added to the board. Shareholders are also focused on a legal challenge to ownership of its oilfields in northern Iraq.

Approval last week to develop the Shaikan field will take output in the coming weeks to about 40,000 barrels of oil per day (bpd) from about 2,000 bpd in 2012.

The company said in May that as part of its aim of moving from London's junior market, it would split its chief executive and chairman roles. Chief executive and founder Todd Kozel had until Thursday also been chairman.

Shares in Gulf Keystone rose 2.4 percent to 148-3/4 pence by 1348 GMT on Thursday as investors welcomed Murray's appointment.

The 73-year-old was chairman of Glencore until earlier this year. He was at the helm in 2011 when the resources group listed and oversaw its $39 billion takeover of Xstrata.

"(Murray's) CV is ideal: a track record in progressing major blue-chip energy companies and a 'black book' of City contacts. Shareholders should embrace this appointment as the company builds a boardroom fit for a full FTSE listing," Accendo Markets trader Marc Kimsey said.

Cantor Fitzgerald analyst Sam Wahab called the appointment positive and said the company was going in the right direction after two years of stalling on the move to the main list.

"I'm glad to see the wheels finally in motion a little bit faster," he said.

Murray's arrival could also help quell investor frustration over the make-up of the board. M&G made its proposal to add new directors in June and shareholders will have the opportunity to vote on that at the annual meeting on July 25.

The company said it is carrying out due diligence on the candidates and will make its recommendation to shareholders "shortly". It is also involved in its own search process to find one other independent non-executive director.

The other big concern is whether Excalibur Ventures is entitled to claim an interest in Shaikan. Investors have been waiting for months for a judgment and the company said in June it expects a decision this year.

Murray, a former legionnaire and the oldest man to walk without a support team to the South Pole, is on the board of Essar Energy and was also on Vodafone's board.

He will be in charge of Gulf Keystone's remuneration committee, a part of the business which could come under shareholder scrutiny.

Kozel's salary and bonus totalled $13.6 million in 2012 and he made $7 million through share options in a year when the company's share price has fallen 30 percent.