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I will not talk about about actual numbers of staff… reductions – Shell CEO Voser

“I will not talk about actual numbers of staff, (the) number of reductions, because quite clearly this is not about staff numbers,” Voser said.

Reuters Canada

Shell CEO says reorganization to streamline firm

Fri Sep 11, 2009 3:51pm EDT

By Jeffrey Jones

CALGARY, Alberta (Reuters) – A pending reorganization at Royal Dutch Shell Plc (RDSa.L: Quote) will streamline the company’s exploration and production operations, Chief Executive Peter Voser said on Friday.

Speaking to reporters after a presentation at a business conference at the Spruce Meadows equestrian facility in Calgary, Voser said the reorganization of the upstream business would position Shell to meet the energy needs of the next decade or more, but he declined to offer details of the plans.

“I will not talk about actual numbers of staff, (the) number of reductions, because quite clearly this is not about staff numbers,” Voser said.

“This is about (creating) an efficient company which will, in a very focused way commercially and externally, drive the company into a very competitive position developing the major projects we have … We will have less staff but we will discuss that internally.”

In May, Europe’s largest oil company by market value said it planned to restructure its exploration division and divide it into two units, one focused on the Americas and another focused on the rest of the world.

One website, citing internal sources has reported that Shell plans to chop 15 percent of the exploration and production unit’s staff but the company has declined to comment.

At his Calgary appearance, Voser also warned that the lack of new investment in oil production since prices collapsed last year threatened a renewed bout of prices hikes within the next four or five years.

“You need to invest throughout the cycle,” he said. “Otherwise we will actually generate the next price hike in four or five years. I think we are in a very dangerous place at these reduced investments that by 2013, ’14, ’15, when demand comes back, we may face a supply problem.”

However he warned that costs of developing new oil supplies must drop further if the industry is to ramp up output to meet demand.

“It’s quite clear costs have doubled since 2004 in the oil industry,” he said. “It has somewhat come down, but not as much as one would hope … This needs to adjust further in order to actually allow the investment levels to continue.”

(Writing by Scott Haggett; editing by Rob Wilson)

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