BP PLC surprised the oil industry by appointing Carl-Henric Svanberg, chief executive of Telefon AB LM Ericsson, as its new chairman -- ending the protracted search for a successor to Peter Sutherland.
The appointment marks the second time a Western major has tapped a top executive from the telecommunications sector. Anglo-Dutch oil giant Royal Dutch Shell PLC four years ago selected Jorma Ollila, then chief executive of Finnish mobile-handset maker Nokia Corp., as its chairman.
Both moves show how eager Western oil companies are to position themselves as technology companies rather than straightforward oil and gas producers, especially when Big Oil is under pressure to help fight against global warming by investing in high-tech solutions.
BP Chief Executive Tony Haywardsaid in an interview that Mr. Svanberg's lack of knowledge of the oil industry wasn't an obstacle. "There is plenty of expertise" in BP with regard to the oil and gas sector, he said. Mr. Svanberg was selected for his leadership qualities and international experience, especially in emerging markets like China, Russia and India, Mr. Hayward said.
Mr. Svanberg, 57 years old, said in an interview that his commitment to fighting climate change -- he is on the advisory board of the Earth Institute at Columbia University -- didn't conflict with his new role at BP, one of the world's largest oil companies. "We have to find more effective ways of dealing with energy," he said, "and in the middle of that, there is BP."
Investors appeared unperturbed by Mr. Svanberg's lack of experience in the energy industry. "Tony Hayward is an oil man through and through," said Colin Morton, of Rensburg Fund Management, which owns $100 million in BP stock. "It's sometimes useful to have someone without the baggage of having worked in the oil and gas industry all his life, who has a fresh outlook."
Mr. Svanberg went to telecom-equipment maker Ericsson in 2003 from Assa Abloy AB, one of the world's largest lockmakers. He is credited with building the telecom into a giant in the sector, with revenue of $27 billion last year and more than 70,000 employees. But he also presided over one of the more painful episodes in Ericsson's history. In the fall of 2007, the company stunned the market with a profit warning just weeks after he issued a bullish forecast.
Mr. Svanberg will be succeeded as Ericsson's CEO by Hans Vestberg, the company's chief financial officer.