Maersk Oil Restructures its Head Office
Maersk Oil announced Thursday that it would launch a full-scale organizational review of its headquarters, a response to Maersk Group's recently completed internal review and to the loss of Maersk Oil's core Qatar production contract.
Under Maersk Group's strategic review, announced September 22, Maersk Oil will be placed into a new division called Maersk Energy, along with Maersk Drilling, Maersk Supply Service and Maersk Tankers.
Maersk Group suggests that Maersk Energy will eventually be fully separated from the rest of the firm through "joint-ventures, mergers or listing." The balance of Maersk Group – Maersk Line, APM Terminals, Damco, Svitzer and Maersk Container Industry – will focus on core transport and logistics operations and will remain as A.P. Møller-Mærsk A/S.
Maersk Oil said Thursday that it had immediate plans to restructure its "Growth" unit and to reduce the size of its "Technology and Projects" group. Subject to government approval, those staff reductions will take place by the end of October. Chief growth officer Ebbie Haan will depart the company October 7.
“We fully recognise this announcement will be unsettling for our employees," said Maersk Oil CEO-designate Gretchen Watkins. "By taking swift action we hope to minimise uncertainty and ensure focus continues, near term, on safe and efficient operations and continued execution of our world-class project portfolio in the North Sea. We are performing well in spite of the market, and we want that to continue.”
Maersk Oil already cut the Growth group by 40 positions in May, reflecting the poor market conditions for exploration activity. Overall, it has reduced operational costs by 25 percent and exploration costs by at least 65 percent in the first half of the year, bringing its breakeven down to $40-45 per barrel.
Watkins emphasized that even in the current market environment, Maersk Oil continues to make multi-billion-dollar investments in the Culzean and Johan Sverdrup projects in the North Sea, which will add an expected 100,000 bpd to the division's portfolio. On Wednesday, Maersk Drilling spudded the first well at Culzean in the U.K. waters of the North Sea, the beginning of a planned five year campaign to drill six production wells. First gas is expected in 2019.