By Michel Rose and Muriel Boselli
PARIS May 29 Total SA's Christophe de
Margerie, who faces a possible trial over alleged bribes in
Iran, has been dogged by legal investigations and market
scepticism during his six years at the top of Europe's
third-largest oil group.
The 61-year-old, whose mandate expires in 2015, has so far
failed to convince that he can deliver on a riskier exploration
strategy. Currently trading at 39.4 euros, Total's stock is
valued at 7.8 times 12-month forward earnings, a 7 percent
discount on BP and Shell and close to a 20
percent discount on average to its global peers.
The decade-long investigations of bribery allegations linked
to Total's dealings with Iraq and Iran have been a persistently
nagging background feature of de Margerie's ascent.
Now the Iran case has come to a head with the company
agreeing on Wednesday to pay $398 million to settle U.S.
criminal and civil allegations that it paid bribes to win oil
and gas contracts in Iran, while a French prosecutor is
recommending de Margerie himself go to trial.
De Margerie firmly denies any wrongdoing and a Total
spokesman said that the company and de Margerie would
demonstrate in any trial that their behaviour had been legal.
But for the man nicknamed "Big Moustache" inside the
company, the development comes at a potentially crucial time,
with just two years left to assure his legacy at the group
before he leaves the chief executive position.
After graduating from the standard Ecole Superieure de
Commerce business school - an anomaly in a company filled with
engineers from elite French schools - de Margerie joined the
financial department of Total in 1974 because, as he once joked,
the company was the nearest to his home.
The comment was typical of a free-wheeling style that
admirers and adversaries alike say masks an astute business
sense and tough negotiating skills.
"KING OF CRUDE"
From a family of ambassadors and top corporate executives,
de Margerie's mother is the daughter of Taittinger group founder
Former Qatari Energy Minister Abdullah bin Khalifa
al-Attiyah once asked de Margerie - a personal friend - whether
he needed to work after being told the plush Crillon hotel in
Paris where they were having dinner belonged at the time to the
"He could have become king of 'Brut' but he has opted to
become king of crude," cousin Pierre Emmanuel Taittinger said of
de Margerie in an interview with the Wall Street Journal - a pun
as "Brut" means both dry champagne and crude oil in French.
De Margerie oversaw Total's Middle East operations and then
joined the group's exploration and production branch, the most
prestigious, in 1995. He became chief executive in 2007.
Aside from the Iran case, de Margerie has watched legal
difficulties mount over Total's dealings in Iraq.
Paris prosecutors asked a criminal court on Feb. 12 to fine
Total 750,000 euros ($1 million) for corrupting foreign agents
during the U.N. oil-for-food programme for Iraq a decade ago.
Total is accused of bribery, complicity and influence-
peddling at the time of the programme, designed to allow Saddam
Hussein's Iraq to buy humanitarian goods through United
Nations-controlled oil sales at a time of international
Total told the court it had taken precautions to avoid
illegal payments to the Iraqi government during the U.N.
oil-for-food programme, but had been thwarted by an opaque
system of middlemen that it only discovered later. The final
verdict is due on July 8.
"Christophe was very affected by the legal episodes in Iraq
and Iran," a close adviser and friend to de Margerie said. "He
was not destroyed, but hurt."
None of that has discouraged de Margerie from pursuing a
"high-risk, high-reward" exploration strategy -- drilling more
wells in difficult-to-reach places -- praised by some but
criticized by investors who say it has yet to yield cash
The strategy is intended to exploit "frontier" basins such
as in the North Sea off the coast of Norway and Scotland to help
Total meet its 2017 output capacity goal of about 3 million
barrels of oil equivalent a day. [ID: nL6N0DB3YE]
At the same time, de Margerie has sought to reduce the
group's exposure to its home French market in the past few
years, notably with the 2010 closure of its Dunkirk refinery.
The closure plan sparked a nationwide two-week strike by
unions, which finally agreed to concede the site after a final
nine hours of talks with management at Total's headquarters.
"He's smart and a charmer, which makes him that bit more
dangerous," said Charles Foulard, the coordinator of the CGT
union at Total who led the 2010 strikes.