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Financial Post (Canada): Shell staff in Calgary may learn fate today; Executives to get details of revamp

Published: Jun 06, 2007

CALGARY – Shell Canada Ltd. executives are bracing today for their first look at the shape of the reorganized company following the minority buyout by its parent, Royal Dutch Shell PLC.

With control moving outside Canada, the top 100 managers will find out who will lead the various businesses and how they will be integrated in the Royal Dutch model, which is run along business units rather than countries, spokeswoman Jan Rowley confirmed yesterday.

The company denied speculation the announcement will lead to re-assignments as well as job cuts for people who will be redundant under the new management.

According to the speculation, the job cuts will start with the leadership group and then reach deeper into the organization.

“The integration team is at a point where we are ready to lay out what the business structure will look like, and then we will be sharing it broadly through the employee base later in the week,” Ms. Rowley said.

“We are not doing anything this week about people’s jobs one way or the other,” said Ms. Rowley, who denied layoffs are in the offing. “We are talking about organizational structure and leadership appointments.”

Shell employs 4,800 people across in Canada, plus an additional 800 in its oilsands group in Fort McMurray.

Royal Dutch recently concluded a $8.7-billion buyout of the 22% of Shell Canada it didn’t own.

The company hopes to have the rest of its team in place later this summer, Ms. Rowley said.

Already, a big part of the company’s executive suite has been vacated, with several top managers — Cathy Williams, chief financial officer, Ian Kilgour, senior vice-president of exploration and production, and president and CEO Clive Mather — retiring from the company.

At today’s meeting, which concludes the first phase of Shell Canada’s integration plan into the Anglo-Dutch oil major, the executive group is also expected to find out whether it will report to Houston, which houses the headquarters of the much larger Shell Oil Co., or whether it will report directly to the global company’s headquarters in The Hague.

Royal Dutch was considering running all its Canadian operation from Houston last fall. When Royal Dutch announced last fall its offer for the minority stock, it said it would look for efficiencies between operations in Canada and the United States.

In an interview with the Financial Post last week, Mr. Mather said Royal Dutch acquired the minority of Shell Canada because it wants to invest and grow the business.

“The global business model is different to ours,” he said. “Their model is to look for functional excellence in different business streams, be it the gas business, the refineries, or whatever.”

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