Shell’s chief executive will address shareholders today, breaking down the oil giant’s plans to reorganise its upstream business.
Driven by low oil price, the Shell boss said the company would “grow to simplify”.
Ben van Beurden said: “We are re-shaping the company and this will accelerate once this transaction is complete. Upstream will be reorganised to increase accountability for performance, and to better align the organisation with the company strategy.
“Asset sales and hard choices on capital spending, such as the recent announcements to cease exploration in Alaska and the development of Carmon Creek heavy oil in Canada, all underline the changes that are underway. Integration planning for Shell and BG is progressing according to plan and today we’re announcing a 40% increase in synergies expected from the recommended combination.”
Shell will announce a “new, simpler upstream organisation”in line with the company’s portfolio reshuffle.
Changes are expected to include establishing a standalone integrated gas business and the creation of a new upstream organisation, which “will span Shell’s world-wide conventional oil and gas businesses”.
The changes are expected to take effect from the start of next year.
This year the firm has made $11billion in savings through a combination of reduced capital spend and operating costs, and reduced its workforce by 7,500 people.
The company leader will be speaking to investors later today.
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