Petrobras to restructure, shed senior management

Petroleo Brasileiro SA (Petrobras) said it has approved a new organizational structure and governance model “as part of the company’s response to the new reality of the oil and gas sector.”

Altogether the plan is expected to result in a cost reduction of about $442 million/year in its 2015-19 business plan.

The first phase will result in the removal of 14 senior management positions. Managerial positions linked directly to the company’s president and board will be reduced to 41 from 54.

The changes also involve the planned reduction of at least 30% of 5,300 nonoperational managerial positions. The company has about 7,500 approved management positions.

The second phase, scheduled for February, will cover the management team’s other functions, Petrobras says. Appointments and allocation of teams will take place beginning in March.

The company this month reported plans to cut capital expenditures for 2015-19 by $32 billion from the previously reported amount to $98.4 billion (OGJ Online, Jan. 13, 2016).

Planned divestments in 2015-16 will remain at $15.1 billion (OGJ Online, Oct. 6, 2015). The company divested $700 million in 2015.

Separately, Petrobras last week reported 2015 proved reserves of crude oil, condensate, and natural gas of 10.52 billion boe, down 20% from the 13.14 billion boe reported in 2014, using criteria from the US Securities and Exchange Commission.

Of the 2015 total, 8.77 billion bbl are oil and condensate, and 278.44 billion cu m are natural gas.

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