HOUSTON, Feb 24 (Reuters) - Royal Dutch Shell's U.S. head Marvin Odum will step down after the company abandoned a troubled drilling project offshore Alaska, and the global oil company said on Wednesday it will split up its U.S. shale and Canadian oil sands unit.
Stung by a 70 percent slide in crude prices since mid-2014, Shell this month reported its lowest annual income in more than a decade and pledged further cost saving measures.
The Anglo-Dutch company said on Wednesday its shale resources unit would become part of the global upstream business led by Andy Brown, and its Athabasca Oil Sands Project and Scotford Upgrader in Canada would be folded into the global downstream unit, headed by John Abbott.
Both Brown and Abbott are based in Europe, where Shell has headquarters and major offices in London and the Hague.
Odum, who joined Shell in 1982, will leave the company in late March and be replaced as U.S. country chairman and president by Bruce Culpepper, executive vice president for human resources.
The decision marks part of a rapid shift within Shell. In November it had announced that a major restructuring of its oil and gas production, or upstream, business would start in January as part of the integration of BG Group, which Shell acquired earlier this month.
On Wednesday, it said it would further simplify its structure so its unconventionals unit that holds shale and oil sands would no longer stand alone.
Odum's departure after 34 years with the company had been expected this year, but the timing surprised some, said a source familiar with the situation.
"Everyone thought he would stay through 2016 while President Obama was still in office, and then move on," said the source, who noted that Odum was seen as having a good relationship with the Obama Administration and Texas politicians.
The source said the decision for Odum to leave at the end of March likely was a signal that the company saw less value in that relationship as Obama's presidency winds down.
The source also said the company's decision to put the North American operations under global umbrellas signals that North America will have a less prominent role in Shell's global footprint than it had under Odum's tenure.
One of the biggest signs of that was Shell's decision in September to abandon its seven-year, $7 billion effort to drill for oil off the northern coast of Alaska. After years of wrangling for permits that the Obama Administration eventually granted with numerous caveats intended to protect the environment, an exploratory well showed some oil and gas, but not enough to keep drilling.
Shell also last year halted its $2 billion, 80,000 barrels per day Carmon Creek development in northwest Alberta, citing high costs and insufficient pipeline capacity to move output to markets.
But other pullbacks came earlier. In 2014 Shell sold shale acreage in Texas, Colorado, and Kansas, as well as natural gas assets in Louisiana and Pennsylvania.
In 2013 Shell gave up on a $20 billion gas-to-liquids plant in Louisiana.
Shell remains focused on global deepwater oil and gas operations. Odum oversaw the startup of two new oil platforms in the Gulf of Mexico and plans for this year's startup of a floating production, storage and offloading vessel as well.
Odum, a mechanical engineer, took over Shell's U.S. operations in 2008. He succeeded John Hofmeister who, like Culpepper, was previously a human resources executive.
"Marvin has had a long and distinguished Shell career, and I'm grateful to him for the central role he's played in the company's success," Chief Executive Officer Ben van Beurden said.
(Reporting by Ron Bousso and Kristen Hays; Editing by Lisa Von Ahn, Terry Wade and Phil Berlowitz)
Copyright 2016 Thomson Reuters. Click for Restrictions.
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