By Ed Crooks
Published: May 27 2009 23:33 | Last updated: May 27 2009 23:33
While Peter Vosers plans for Royal Dutch Shell have received widespread praise for their focus on cost-cutting and operational performance, they still leave important questions unanswered.
In particular, several analysts queried the merits of merging the exploration & production and gas & power divisions into a single unit, and then immediately dividing that unit between two directors.
One of the central themes set out by Mr Voser, who takes over as chief executive on July 1, was simplification. He wants quicker decision-making and clearer chains of command, and less bureaucracy and consensus-building.
That change is exemplified by the fact that while last year Shell had five executive directors on the board, from now on it will have just three: Mr Voser; Simon Henry, his successor as chief financial officer; and Malcolm Brinded, currently head of exploration and production.
That structure mirrors the small top executive team at ExxonMobil, famous for its highly centralised management style and its industry-leading performance.
Merging the gas and power division into exploration and production to create a new upstream business fits well with that lean management structure.
However, Mr Voser has also chosen to divide the combined unit into an Americas business run by Marvin Odum, now president of Shell Oil, the US subsidiary, and the rest-of-the-world business under Mr Brinded.
Both men will have places on Shells executive committee, its eight-strong senior management team.
That geographic separation raises concerns among some analysts.
Neil McMahon of Sanford Bernstein says: I dont understand the split of the upstream business into regions.
It means that, potentially, two senior managers will be pushing for their own projects to be developed. The risk is that capital may not get allocated to the right projects.
The creation of a separate projects & technology unit under Matthias Bichsel, now head of technology in exploration and production, who also joins the executive committee, is another potential source of complexity.
The new department will come in to work on large oil and gas developments identified by the upstream division, and then hand projects back to upstream once construction is complete.
However, Mr McMahon and other analysts say that the creation of a global centre of excellence, also following an Exxon model, will be valuable for helping Shell to address costs and delays in the vast projects that have become increasingly important to the company.
Shell has suffered high-profile delays and budget overruns in recent years, most notoriously in its Sakhalin 2 project off the far east coast of Russia, where the final $20bn cost was double the original estimate.
The energy groups executive-level restructuring will also see the senior management team lose its female members.
Linda Cook, head of gas and power, leaves the company at the end of next month.
Roxanne Decyk, director for corporate affairs and sustainable development, is stepping down from the executive committee to head the Washington-based government affairs department.
EDITORS CHOICE
Shell shake-up to cut costs – May-27
Shell clears way for senior shake-up – May-26
In depth: Oil – Mar-27
Copyright The Financial Times Limited 2009
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
