When EnergyReview.Net earlier this year revealed the possible impact on New Zealand of The Hague's worldwide EP initiative, industry commentators said Wellington's Shell Petroleum Mining staff were shell-shocked, believing their company would be substantially downsized.
Now, these same commentators and others are saying STOS, operator of the Maui, Kapuni, McKee and Mangahewa fields, is more likely to feel the pruning knife than Shell Petroleum Mining.
"SPM will not survive in its current form but will survive as a legal entity, as the owners of equity. STOS, on the other hand, which has faced some huge possible conflicts of interest, might end up more as a support company, but not involved in any exploration," said one commentator.
Another said some people in the industry had seen STOS as being "bloated" for several years. "Integrating operations, pulling everything back to The Hague and Singapore would mean bringing EP people in from outside New Zealand for exploration.
"You have to wonder at the overlap between SPM and STOS and wonder if both, in their present form, are really needed?"
A third commentator said he could see a significant downsizing of STOS, with the present 300-plus staff dropping to below 250. While operations staff would remain, he wondered if such departments as human resources, information technology and finance would survive.
EnergyReview.Net in February outlined the worldwide Shell EP restructuring, headed by EP chief executive officer Walter van de Vijver, which was likely to mean future EP projects run from The Hague, with operational support in the Asia-Pacific region coming from Singapore.
At that time Shell New Zealand chairman Lloyd Taylor told EnergyReview.Net that details regarding how each region would function in the global business and services environment had yet to be finalised.
He said SPM, as owner of all the EP JV assets of Shell in NZ, would not be shut down. Material downsizing, apart from his role (as EP managing director) ceasing to exist, was unlikely as all the asset owner responsibilities, including statutory responsibilities would still have to be delivered.
Taylor said STOS was a service provider-operator and did not own any assets, so it was not part of the equation.
Since then rumours have concentrated on the small SPM staff, of 20 or so people mainly in Wellington, getting smaller, but surviving, while the Taranaki STOS team looks set for a major reshuffle/downsizing.
Some commentators are now saying they would not be surprised if Shell - believed to be very disappointed with its 2001 purchase of Fletcher Challenge Energy - began planning an exit strategy for implementation after Maui, particularly offshore exploration efforts fail to find substantive new reserves.
"The issue is what we have now and are likely to have in the next few years; the number of experts and assets. The whole structural thing may end up significantly smaller, more suited to smaller, more nimble independents and perhaps a medium sized company or two; not a major like Shell," said one.
New STOS boss Paul Zealand, who took over from former general manager Chris Beath in March, has been unavailable for comment.
