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17. Match the job title with the definition.

A. CEO (Chief Executive Officer)

1. refers to a rank in senior management, usually reports directly to the president or CEO of the company, could be more than one in different areas (Upstream, Downstream, Oilfield services)

B. CFO (Chief Financial Officer)

2. a person in charge of the Board of Directors

C. CIO (Chief Information Officer)

3. a mid-level manager who has a specialized, but multidisciplined understanding of everything related to exploration and production, is responsible for tactical decisions within a subsidiary, reports to a managing director

D. Chairman of the Board of Directors

4. a job title for somebody who is a second in command after a General Director in an oil producing subsidiary

E. EVP (Executive Vice-President)

5. job title for the head of the information technology group within an organization

F. Development Director (DD)

6. is the highest-ranking corporate boss in charge of total management of a corporation, company, or organization

G. Asset Manager (AM)

7. a person who deals with all the governmental authorities regarding the licenses and permits, and also looks after the reservoir development

H. General Director (GD)

8. is responsible for financial planning and record-keeping, as well as financial reporting to higher management

I. Chief Engineer (CE)

9. a lower-level manager whose decisions are generally short-term, responsible for operational decisions related to an asset, in some companies reports to a Development Director

J. Chief Geologist (CG)

10. a person in charge of a legal entity or a subsidiary, reports to the headquarters, but usually is located in the region

18. Complete the diagram showing the company structure using the definitions in a.

CG

Geologist

CEO

CIO

CFO

CE

CHAIRMAN of the BOARD of DIRECTORS

AM

GD

DD

EVP

19. Complete the sentences.

1. The most important person in charge of an oil company is ………..

2. ……………. defines the strategy and set targets for the company.

3. More profitable is ………………………………………………….

4. An oil company consists of ……………………………………….

5. Chief engineer is more important than …………….

20. Read the text and discuss the after-text questions. See appendix 3 (pg. 63-64 ). An Example of a Difference between Russian and Western Operating Company Structure

The information about the companies that are mentioned above refers to the Central Headquarters of these companies. This could be described as the mother company. All of these companies have operating companies that are spread out regionally or internationally which report to the Central Headquarters, where financial and performance indicators are consolidated. An example of this is Royal Dutch Shell that has its Central Headquarters in The Hague in Holland. Royal Dutch Shell also has operating companies in Nigeria, Oman, Australia and many other countries around the world. Rosneft has headquarters in Moscow and operations in Sakhalin island, in Siberia and the Timan-Pechora province.

An Integrated Asset Based Organization that you would typically find in a western operating company is centered around Asset teams. These asset teams look after and are responsible for ALL activities relating to an asset (or a group of assets). In a way an Asset team can be seen as a micro company within the main company. To operate in this way the Asset team needs to contain an integrated team of specialists. The reason for working in this way is the idea in the west that integrated teams are more effective than the functional approach. The Asset based organization also allows management to allocate budget, set targets and manage improvements more effectively because each Asset Manager is responsible for his Asset. The disadvantage of an Asset based organization is that it is difficult to maintain the technical level of functional specialists.

Until twenty years ago Functional based organizations as seen in Russian operating companies were also typical in Western companies. In such organizations all specialists of one function work together in one room and support all of the operating companies assets. The advantage of this system is that by working closely together within the function, specialists maintain a high level of technical expertise. The disadvantage is that integrated team work is absent and responsibility for a single asset is held only at the General Director level (see pictures below) this system is that by working closely together within the function, specialists maintain a high level of technical expertise. The disadvantage is that integrated team work is absent and responsibility for a single asset is held only at the General Director level (see pictures below).

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