* Sources speak of management infighting
* Q2 operating profit halved from year ago
* Supervisory board to meet Tuesday
By Shadia Nasralla and Angelika Gruber
VIENNA, Oct 12 (Reuters) - Pressure is mounting for an early departure of Gerhard Roiss as chief executive of OMV after a drop in operating earnings and as local media and sources close to the company report corporate infighting.
Austrian media have cited sources saying that his contract might be cut short at a supervisory board meeting on Tuesday.
A year ago, OMV extended Roiss’s contract until March 2017, but since then operating profit halved in the second quarter as the crisis in Libya forced OMV to raise production in higher-cost countries such as Norway.
Its gas segment, pressured like other European gas firms, has not flourished as much as hoped, and the sources say that the plans of 62-year-old Roiss to shrink the division have led to friction with its head, German Hans-Peter Floren, 53.
In 2013 the gas and power division contributed only 1 million euros ($1.3 million) to OMV’s overall earnings before interest and tax (EBIT) of 2.7 billion euros.
“On the one hand it’s market-driven problems at OMV,” said one source familiar with the matter. “There are also problems with the mood and when it comes to cooperation at the company.”
Another source familiar with the situation echoed this view. “Floren somehow is being blamed,” the source said, adding that Roiss and Floren, part of what he called a “bunch of alpha animals” in OMV management, clash and play people off against each other.
“At some point an owner says: That’s not on,” this source said, referring to Austrian state holding company OIAG, which holds a 31.5 percent stake in OMV, and Abu Dhabi’s International Petroleum Investment Co (IPIC), which has nearly 25 percent.
The second source, who asked to remain anonymous, added that the owners had repeatedly asked Roiss and Floren to make peace.
OMV and OIAG declined to comment.
Last week, Austrian newspaper Die Presse said OMV might cut short the contracts of both Roiss and Floren, citing unnamed sources in a supervisory board subcommittee. No final decision can be made before Tuesday’s full board meeting.
“The question is whether a person like Roiss would want to continue his work after this public blowup,” one source said.
Markets might see an early exit positively if it ushered in a period of calm after the media frenzy around Roiss, who has worked for a quarter century at OMV and became CEO in 2011.
“If it happens it might actually be perceived as an improvement by the market and investors,” said one analyst covering OMV. “There are so many rumours about him.”
OMV’s shares fell to a more than two-year low on Friday after having shed almost a third of their value since the beginning of the year.
If Roiss and Floren leave, OMV’s management board will be stripped to three of its existing members: Refining and Marketing head Manfred Leitner, Chief Financial Officer David Davies and Jaap Huijskes, head of exploration and production.
OMV said last month Huijskes would leave the company in 2016, more than two years before his contract ends.
Davies, 59, a German-speaking Briton who has been OMV finance chief since 2002, has been mentioned as a possible successor.
“He (Davies) certainly is to be taken seriously as a candidate if you don’t want to make experiments,” the source said.
Another source familiar with the situation had told Reuters earlier this year that IPIC had grown unhappy with Roiss and wanted someone who was not Austrian to lead OMV.
1 US dollar = 0.7915 euro Additional reporting by Michael Shields; editing by Jane Baird