Boardroom shake-up at Cairn sees Gammell take the chair

The company's founder, Sir Bill Gammell, will become non-executive chairman of the group and is succeeded as chief executive by Simon Thomson, 46, the legal and commercial director who leapfrogs deputy chief executive Mike Watts to the role.

Watts will remain in his role, forming a new executive leadership team with Jann Brown, the group's finance director, who will combine her current duties with becoming managing director.

The reshaping of the board and the choice of Gammell as chairman was prompted by the announcement in February that the current chair, Norman Murray, would take over the chairmanship of oil field services firm, Petrofac.

Also leaving the board are two long-standing members of the Cairn team who were instrumental in transforming what was a small explorer into a 5.7 billion, FTSE-100 company.

The departure of Philip Tracy, 61, the engineering and operations director, and Malcolm Thoms, 55, the group's chief operating officer, signals a major shift in the company's direction from an oil and gas developer and producer in its highly successful Rajasthan fields back to being a prospector, this time off Greenland.

Gammell, who has run the business for 23 years, said: "I have a strong belief in promoting from within and I saw an opportunity (to do so] within the team.

"Those of us who are giving up office as executives have been together 20 odd years and had a fantastic run."

Gammell acknowledged that his move to the chair is "not normal". The UK Corporate Governance Code frowns upon the previously widespread practice of a chief executive stepping up to become chairman of the same company, although breaches of the code can be allowed following consultation with shareholders.

Cairn said it had consulted major shareholders and said they were "comfortable" with the decision.

Jonathan Copus, oil analyst at Deutsche Bank, said the move would reinvigorate the board. "We view today's news to be a positive step forward for Cairn's future," he said in a research note.

The boardroom changes have been long in the planning but have been held up by the delays facing the deal to sell the stake in Cairn India, estimated to be worth 5bn, to Vedanta Resources.

Sources suggests the announcement is meant to come days ahead of a green light from the Indian government, which has blocked the deal for close to a year in a bitter dispute over royalties.

Gammell declined to comment about when Indian ministers currently looking at the deal might make a final decision.

As a non-executive chairman, Gammell will take a "substantial reduction" in the time he spends at Cairn.But as the face of Cairn among media, politicians and policy makers on the subcontinent, he will remain chairman of Cairn India and will continue to take full responsibility for the Vedanta deal until its completion.

Cairn Energy shares closed down 1.9 per cent, or 7.6p, at 403.3p.

PROFILES

SIMON Thomson joined Cairn in 1995 as a lawyer before becoming group commercial manager and assistant to the chief executive, joining the main board in 2006. He chaired the internal group that led the licensing and exploration programme in Greenland, where the bulk of Cairn's operations will be focused subsequent to the currently delayed deal to sell off its majority share in its Indian operations.

Jann Brown, 55, took over the role of finance director in 2006 following the departure of Kevin Hart to Bowleven. Brown's role will include widened responsibilities in human resources, corporate affairs and company secretarial, becoming the firm's managing director. She joined Cairn in 1998 after a career in the accountancy profession, mainly with KPMG.