The president of Royal Dutch Shell's U.S. division is leaving the company as part of a reorganization announced Wednesday, and Executive Vice President Bruce Culpepper was named as his successor.
Marvin Odum, 57, has been with the company for 34 years and held the post at its U.S. division, Shell Oil Co., since oil prices were at record highs. He also was in charge during Shell's failed Arctic drilling bid. Culpepper, who will become the U.S. country chairman and the president of Shell Oil on April 1, has been overseeing human resources in the Americas.
"Marvin has had a long and distinguished Shell career and I'm grateful to him for the central role he's played in the company's success," Ben van Beurden, chief executive officer of Royal Dutch Shell, said in a news release Wednesday. "He leaves our important businesses in the Americas well positioned for the next phase of their development."
Shell also said it would close the unconventional resources business unit it created earlier this year to house its shale and heavy oil activities in the Americas, including oil sands projects in Canada and fracking of dense rock formations in the U.S. With Odum's departure, Shell will move the assets under the administrative controls of its upstream and downstream businesses. Odum had been appointed to lead the division last year.
Shell cast the move as part of a bid to simplify its structure, coming alongside the acquisition of BG Group Plc, which was completed this month. Shell has said it will sell $30 billion of assets in the next three years, including some acquired through the BG deal.
"The end of the unconventional division in Shell may be a precursor to a sale of some of U.S. shale assets," Ahmed Ben Salem, an oil and gas analyst at Oddo & Cie in Paris, said by phone. "It's also a part of Shell's attempt to streamline and simplify the company after the BG acquisition."
Royal Dutch Shell has pared capital spending and shed workers to weather collapsing crude prices and facilitate the BG acquisition. In North America, Shell sold off natural gas and shale assets in Wyoming, Louisiana and Pennsylvania and abandoned projects in Alaska and Canada, which forced a $7.9 billion writedown in the third quarter of last year. Shell also had a $3.9 billion adjusted loss in 2015 from their Americas business.
RBC Capital Markets analyst Biraj Borkhataria said Shell is emphasizing "its core competencies" in deep-water development and liquefied natural gas. "The unconventional resources business has long been a troubled area for Shell," Borkhataria said in a research note. "We believe Shell is making the tough choices required to transition into the new entity."
For nearly eight years, Odum has served as the U.S. face of Shell, testifying about industry tax deductions on Capitol Hill and proclaiming the company's support for pricing carbon dioxide emissions. He used his platform to describe Shell's future as increasingly reliant on natural gas, going so far last year as to suggest that the company could drop "oil" from its name as alternative energy sources flourished.
Odum presided over one of Shell's most controversial oil projects: its failed bid for crude under Arctic waters north of Alaska. The Arctic endeavor, launched after Shell spent a record-setting $2.1 billion buying 275 Chukchi Sea drilling leases in a 2008 government auction, spanned several years but only led to drilling during two years, 2012 and 2015.
The 2012 campaign was marred by mishaps, from a drifting drillship and air pollution permit violations to the grounding of Shell's Kulluk drilling unit amid a botched tow to Seattle. After two months of drilling last year led only to insufficient quantities of oil and gas in a test well, Shell said it would indefinitely abandon Arctic oil development.
Odum succeeded John Hofmeister as the head of Shell Oil in June 2008, after overseeing exploration and production in Canada. His Shell career dates to 1982, when he began as an engineer with the company. When Odum became president, oil prices were around $137 per barrel; they would climb $10 more within weeks to reach a record high before beginning to slide, with West Texas Intermediate for April delivery closing at $31.87 a barrel on the New York Mercantile Exchange on Tuesday.