Statoil ASA STO recently declared that it is reorganizing its business structure and operating model to become a more competent and cost efficient firm, going forward.
The company is already undergoing efficiency work via the STEP (Statoil Technical Efficiency Program) and OE (Organisational efficiency) programs. The company’s decision to change its business structure and operating model form a vital part of the same.
Statoil plans to merge operations in mid and north Norway into a single business unit – Operations North. Statoil’s two main regions of operations – Norwegian Sea and Barents Sea – have significant activity and large frontier areas with long-term prospects. The company expects the merger of these expert communities to boost synergies, and cost savings as well as strengthen its position for future business opportunities.
Statoil intends to bring about certain changes in its Technology, Projects & Drilling (TPD) section as well. The company has decided that its TPD TEX (technical excellence) and TPD RDI (Research, development and innovation) services will also be consolidated into a new research and technology unit – TPD R&T. Moreover, the company plans to simplify its project development process.
Statoil expects all the changes to be fully incorporated within its business areas by the end of October. The reorganized entity will become operational by the end of the current year. The latest developments follow the company’s recent announcement that it could terminate 1,500 workers by 2016.
Statoil is a Norway-based major international integrated oil and gas company. Currently, Statoil operates in four segments: Exploration and Production Norway, Natural Gas, International Exploration and Production and Manufacturing and Marketing.
Statoil’s endeavor to improve recovery of resources in mature fields is commendable. The company has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (NCS).
Statoil currently holds a Zacks Rank #2 (Buy). Other favorably-placed stocks from the same space are Transmontaigne Partners L.P. TLP, CNOOC Ltd. CEO and LRR Energy, L.P. LRE. All these stocks sport a Zacks Rank #1 (Strong Buy).
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