Organization and New Leaders Set for StatoilHydro

Organization model, 70 senior leaders and principles for further staffing have been presented today to employees who will be affected by the proposed merger between Hydros oil and gas activities and Statoil.

"We have laid the foundation for a powerful competence-driven organization, rigged for safe and effective operations, international growth, and first-class technology and project execution," said Helge Lund, leader of the Integration Planning Committee and proposed Chief Executive of the combined company.

The merged company, which is proposed established under the name StatoilHydro, will have six business areas. The organization structure and 70 managers who will report to members of the company's executive board were presented today. Information about the managers is available on the companies' websites.

The establishment of StatoilHydro is based on the following principles:

Development of a value-based performance culture within a framework of high standards for leadership, health, environment and safety, ethics and social responsibility.

Continued operations as an integrated company with close cooperation between business areas.

Establishment of a competent organization that secures equal opportunities for employees in Hydro and Statoil, builds on the best from both companies and ensures an actual integration of the two companies.

Business areas' main activities and location

Exploration and Production Norway will be responsible for safe and efficient operations and for taking advantage of the full potential of the resources on the Norwegian Continental Shelf. The operational unit divides the Norwegian shelf in three areas, which will be managed from Stavanger, Bergen and Stjørdal. The remaining management will be located in Stavanger and Bergen, and the business area will also have considerable activity in other locations, including in Kristiansand, Harstad and Hammerfest.

International Exploration and Production will create and develop international growth positions. In addition to exploration and business development, the international organization has four geographic units. One of these regions will be managed from Stavanger, one from Houston and two from Oslo, where the business area's management and remaining units will be located.

Natural Gas will have the responsibility for securing effective operations of gas the infrastructure and to maximize the value of the company's gas volumes. Natural Gas will be managed from Stavanger and will have operations at Kårstø and Kollsnes, in addition to international activities.

Manufacturing and Marketing will be responsible for the company's refineries and global oil-trading operations, as well as the service-station network and retail operations. The business area will be managed from Stavanger, while retail operations will be managed from Oslo as today. The business area also will include the industrial facilities at Sture, Mongstad and Tjeldbergodden in Norway and Kalundborg in Denmark.

Technology and New Energy will be the company's competence center for technology and is also responsible for establishing a strong position in renewable energy and CO2 handling. The business area will be managed from Bergen and will have activities in Stavanger, Trondheim and Porsgrunn.

Projects will be responsible for delivering developments to the company's global operations on time and budget, with optimal quality and technology. The business area will be managed from Oslo, but will also have functions in Stavanger and Bergen, as well as on project locations.

The company's corporate center with staff, support and service units will have functions both in Stavanger and Oslo, with the largest share of units and employees located in Stavanger.

"Today, we have also presented the leaders who will bring StatoilHydro to a new level. We have had the opportunity to choose among very competent candidates from the two companies and have put together strong management teams with strong competence, diversity and balance," Helge Lund said.

Staffing principles
Organization, staffing principles and means have been developed in close cooperation with union representatives in both companies.

"All unions in the works council have endorsed the new organization and staffing principles. It has been very important for us to get such backing," said Hilde Merete Aasheim, who leads the integration planning until the merger is completed.

The organization combines strengths from both companies and secures geographic balance without major transfer of personnel. Change of location will take place on a voluntary basis. Employees will have the opportunity to influence their position and location in the new company, but should also feel confident about getting a position with the same fundament as they have today.

All employees will have the opportunity to state their interest in any position before placement in the new organization. Anyone who does not wish to state such interest will be placed directly.

Excluded from the integration planning process are personnel in permanent positions at all offshore and onshore plants of both companies, as well as the Energy & Retail business unit, except for Sweden.

All employees affected by the merger will be offered a job in StatoilHydro. Possible redundancies will be solved through new growth initiatives, reduced use of consultants, training opportunities and early retirement.

The appointment of managers reporting to those presented today starts this week. The main manning process starts before the summer holiday and is expected to be completed in September.

"We have now reached an important milestone in the integration planning, but a lot of hard work remains. Constructive cooperation with the unions and firm commitment by employees in both companies have enabled us to stick to our schedule," said Hilde Merete Aasheim.


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