Reynolds to chair Bula Resources

The former Taoiseach, Mr Albert Reynolds TD, has become chairman of Bula Resources, the troubled oil company. His appointment is part of a major re-organisation of the board, with four existing directors stepping down.

Along with the changes on the board, Bula has secured £1.75 million (€2.22 million) of new funds by placing 175 million new shares at 1p (1.27 cents) per share. The money will be used to finance its activities in the middle-east and north Africa.

Institutional shareholders - Morgan Grenfell Asset Management and Capital International Inc - are increasing their shareholding, while unnamed private investors are taking up some of the new shares.

Mr Reynolds described the new board structure and funding arrangements as a "turning point" for the company, which was the subject of a long investigation by a Government-appointed inspector, Mr Lyndon MacCann.

His report found that Bula's former chairman, Mr Jim Stanley, had personally benefited by £660,000 sterling from the sale of Bula shares transferred to Mir Oil Development Limited. Mr MacCann also found that Mr Stanley was responsible for a bogus oil find report relating to an oil well in western Siberia. Mr Stanley has denied both these claims.

A statement from the company said Mr Reynold's contacts in Libya and Iraq would "significantly enhance Bula's position". The company's former chairman, Mr Tom Fitzpatrick, has stepped down as chairman and director to concentrate on other business and professional interests.

Bula's new managing director is Mr Tony Peart, who recently resigned as managing director of MMS Petroleum, following its take-over by Ramco Energy.

He is a former executive with several oil companies, including Lasmo plc and Ultramar plc. Mr Tommy Dreelan, a director of PSL Group, joins the board as a non-executive director. Mr William Lowry remains on the board as technical director.

Apart from Mr Fitzpatrick, the other directors who resigned are Mr Patrick Mahony, who was managing director, Mr Ivan Walpole and Mr John McGilligan. Mr Walpole and Mr Mahony were part of the board which was heavily criticised in Mr MacCann's report.

The board will propose a new share option scheme at a forthcoming extraordinary general meeting of the company. As part of this, Mr Reynolds or his family trusts, will be granted share options over 5 per cent of the company's current share capital, exercisable at the placing price of 1p (1.27 cents). A further 5 per cent will be available to be granted to directors, employees and consultants engaged by the company.