KEVIN Gallagher, CEO of engineering services group Clough, will take on the role of managing director and CEO of Santos as the oil and gas producer embarks on $3.5 billion of capital initiatives to strengthen its balance sheet.

Widely lauded for transforming Clough’s business performance following years of inconsistent earnings and a stagnant share price, Mr Gallagher is expected to commence the top job at Santos in early 2016.

Santos executive chairman, Peter Coates, said Mr Gallagher’s track record made him the ideal candidate to lead Santos as it focused on driving operational performance.

“Kevin has nearly 25 years’ experience in managing oil and gas operations in Australia, the USA and North and West Africa,” Mr Coates said.

“He is ideally suited to lead Santos as we move from a focus on major strategic developments to delivering strong operational results in a continuing low oil price environment.

“Kevin will bring fresh insight and a proven track record of achievement for shareholders from a career that spans international oil experience with Mobil, the Woodside-operated North West Shelf LNG venture and most recently, as CEO of Clough since 2011.”

Mr Gallagher looks forward to the opportunities offered by the Santos portfolio, which he said were exciting irrespective of the current global oil price environment.

“I am very proud to have led Clough for the last four years during which I have gained an in-depth insight and understanding of the oil and gas contracting sector to complement over 20 years of oil and gas operating experience,” he said.

“I believe I leave Clough strongly positioned, with an excellent management team in place.”

Mr Gallagher’s appointment followed a strategic review of Santos’s operations which resulted in a new $3.5 billion equity raising strategy. The strategy includes a new share entitlement offer expected to raise $2.5 billion, and the placement of $500 million worth of shares in international private equity firm, Hony Capital. It will also raise $520 million from the sale of a 35 per cent stake in the Kipper gas field.

Mr Coates said Santos had to take further action to become a more agile, low cost producer delivering attractive shareholder value.

“The company has made good progress towards that goal through the year with a $900 million reduction in capex and circa $370 million per annum in cost savings through headcount reductions of some 770 positions, together with meaningful supply chain savings,” he said.

“However, the strategic review which we have just completed has shown that we can further simplify the business and enhance financial discipline.

“Kevin’s record on costs, efficiency, leadership and profitability as CEO of Clough, combined with his experience as a senior Woodside executive on the North West Shelf venture make him ideally suited to lead the Santos senior executive team and to develop the company’s strategy from here.”