In the wake of plunging oil prices, British energy group Royal Dutch Shell's new chief executive announced a major restructuring on Wednesday, which will save the company billions of dollars, but put nearly 24,000 jobs at risk.

Peter Voser, who has been the chief financial officer of the company for five years will take over from Jeroen van der Veer as CEO on 1 July 2009, has wasted no time in announcing drastic changes, being well aware of the company's financial intricacies.

The multinational petroleum company of Dutch and British origins, said that its Upstream activities, which are currently managed in three separate organisations - exploration and production, gas and power, and oil sands, will now consist of two businesses, 'upstream Americas' covering North and South America, and 'upstream international' covering the rest of the world.

It means that from 1 July all the company's exploration and production, gas and power and oil sands units will be merged into two new divisions.

Changes have also been made in the downstream business, where in addition to the refining, marketing and chemicals businesses, the downstream portfolio will be expanded to include trading and alternative energy activities in Shell, excluding wind power, which will become part of upstream.

Peter Voser said, "this new structure will increase accountability in the company, and improve Shell's performance on delivering new projects and developing new technologies."

Staggered by the steep downturn in oil prices, from $147 a barrel in July to $62 a barrel this week, the Hague-based oil giant had posted a $2.81-billion net loss in the final quarter of 2008.

This was the first time in 10 years that the oil major posted a net loss for any quarter (See: Shell remains upbeat despite first loss in 10 years). The loss comes in the backdrop of a net profit of $8.47 billion in the final quarter of 2007, when crude oil prices soared before peaking last July.

Although the company is yet to announce the job cuts, industry observors feel that the merging of the businesses is likely to put nearly 24,000 global jobs at risk in the company's staff strength of 102,000 employed in more than 100 countries, with the axe falling on more than 30 per cent of senior executives in the two divisions.

In the new restructuring, the company said a new business - projects and technology - will combine all of Shell's major project delivery, technical services and technology capability covering both upstream and downstream. It will also oversee Shell's safety and environment performance.

The company said that the corporate functions will be refocused, with activities reallocated directly into the businesses, or consolidated into the portfolios of the chief financial officer.

Peter Voser said, "The industry, and Shell, faces considerable challenges, from high costs, volatile energy prices, and competition for new projects."

"We must build on our recent momentum, improve our operating performance and increase the pace of strategy execution, to raise our competitive position. The changes we have announced will have a major impact on the organisation. We will speed up our decision-making, and increase both personal responsibility and personal accountability,'' he added.

A day prior to the company announcing Voser as the new CEO, Linda Cook, head of the gas and power division and a contender for the top post, resigned abruptly.

A Kansas-born petroleum engineer, Cook, who had earlier headed the company's operations in Canada, is also on the board of directors and has worked for the company for nearly three decades. She is scheduled to leave next week and forfeit a loyalty bonus of £800,000 by quitting before 2011.

The £800,000 loyalty bonus is given by Shell to its executives who are in contention for the top and commit to stay with the company for three years even if they lose out the chief executive's job.

Had Cook succeeded in becoming Shell's CEO, then she would have been the first woman to head Shell.

Last week at the annual general meeting of the company, shareholders refused to go along with the company's remuneration report and shot down the board's proposals to award its directors bonuses. (See: Shareholders shoot down Shell's payouts). The shareholders rejected the report 59.42 per cent to 40.58 per cent with 1.3 billion votes in favour and 1.9 billion votes against.

The payout dispute has erupted in the wake of the poor performance of the company as against its peers with shares taking a fall of around 25 per cent from £21.50 to 19 May's close of £16.35.

Shell's Nigerian woes move to US courts

Shell is beset with problems in its operations in Nigeria, where it has substantial exposure to the country's oil industry.

The local populace of the Niger Delta area where Shell is exploiting the oil and gas resources, have long been complaining about unfair treatment by the company in sharing profits of the natural resources.

Activists and the family of Nigerian writer, poet and playwright, Ken Saro-Wiwa Ogoni are convinced that Shell had a role to play in his execution as well as nine other anti-oil campaigners by the Nigerian government in 1995.

His family has now bought the case to the US, where they are suing Shell for its alleged role in the events leading up to his death.