CEO Don Voelte has made big changes to the executive team structure at WA's biggest company, increasing the number of direct reports after some operational setbacks.
Western Australia’s largest listed company, Woodside Petroleum, has implemented a major restructuring that concentrates power in the hands of managers who have been recruited by chief executive Don Voelte over the past two years.
The big winners from the changes include former investment banker Mark Chatterji, who has been promoted to the new position of director commercial, and experienced oil industry executive Paul Moore, who has been appointed director development.
Former chief operating officer Keith Spence has moved to a newly created role as director enterprise capability, where he has much narrower responsibilities.
Another major change was the resignation of former Ernst & Young managing partner Michael Minosora, who joined Woodside just four months ago.
The job that was created for him, director corporate centre, has been abolished under the new structure.
Woodside has bolstered its operational ranks with the recruitment of Apache Energy’s regional vice-president and managing director, Eve Howell, who will be director North West Shelf.
The sweeping management changes follow a series of operational setbacks for the oil and gas producer, highlighted by the recent downgrading of its 2006 production target to 72 million barrels of oil equivalent from 76 million barrels.
Its problems have included lower-than-expected output from the Chinguetti project in Africa, construction delays at the Otway project in Victoria and development delays in the Gulf of Mexico following major hurricanes in 2005.
In WA, a series of cyclones affected production at the North West Shelf project while the start-up of the Enfield oil project was delayed by technical problems.
Mr Voelte hinted at changes when he announced the revision last month.
“The need to revise the production target is disappointing and the accountability lies with our management team,” Mr Voelte said.
The company has also acknowledged it is facing cost pressures on the North West Shelf’s $2 billion phase 5 expansion project.
The new management structure includes a seven-member executive committee headed by Mr Voelte, who joined Woodside a little more than two years ago.
Other members of ExCom are:
• Mr Chatterji, who joined Wood-side in 2004 after working at Goldman Sachs, Merrill Lynch and Mr Voelte’s old company, Atlantic Richfield. His new role includes responsibility for LNG and oil marketing, the North America LNG project, supply chain logistics, strategic planning and takeovers.
• Mr Moore, who joined Woodside in 2005 from Santos. As director development, he will be responsible for drilling and completions.
• Mr Spence, whose new role covers human resources, corporate affairs, Indigenous and environmental affairs, health and safety, security and science and technology.
• Agu Kantsler, who is a relative veteran, having been seconded from Woodside’s largest shareholder Shell in 1995.
• General counsel Rob Cole, who was recruited earlier this year from Mallesons. He previously reported to Mr Minosora but now reports direct to the chief executive.
• Chief financial officer Ross Carroll, who joined Woodside last year from BHP Billiton.
The new structure has increased the number of staff reporting directly to Mr Voelte, particularly on the operational side.
This indicates a shift in focus from Mr Voelte’s previous descriptions of the management structure.
He has previously described his role as chief executive as one of creating value for the company – that is, seeking opportunities and exploring and acquiring options – while Mr Spence’s role as chief operating officer was described as delivering value, by turning opportunities and options into profit for shareholders.
The statement issued last week said Mr Spence’s future role would be to ensure Woodside had adequate staffing, skills, technology and relationships required to deliver the company’ growth portfolio.
The changes also reflected a recognition that the shortage of skilled labour had become a big business risk.
On the operational side, Mr Voelte will chair a nine-member business operations committee. This will include the directors in charge of North West Shelf, Australia, projects, operations and development, all who previously reported to Mr Spence.
The directors responsible for the Middle East and Africa, the US, the upcoming Pluto LNG project and other major new projects will also be members of the business operations committee and will continue to report to Mr Voelte, as will the members of the executive committee.
Ms Howell will join Woodside in September after more than 20 years with Apache Energy in Australia.
“We are fortunate to have someone with her experience and credentials taking on a role, which is so important for Woodside,” Mr Voelte said.
She replaces former Shell executive Jack Hamilton, who left Woodside in May to head Canadian-based firm InterOil.
Ms Howell’s appointment to Woodside doubles the number of women who report directly to the chief executive to two; the other is director Australia, Betsy Donaghy.
Ms Howell and Mr Spence have a prior link through their membership of the industry advisory board of the Western Australian Energy Research Alliance.
