We have approved our new governance model and structure
Our Board of Directors approved, at a meeting held on Wednesday (Jan. 27), our new organizational structure and our new management and governance model.
The reformulation was made as part of our response to the new reality of the oil and gas industry, which has led us to prioritize more profitable activities, making us more competitive.
The restructuring involves activity redistribution, area mergers, and a review of the decision-making model. One of the central objectives is to enhance the control and compliance mechanisms.
The changes are expected to allow for cost reductions worth up to R$1.8 billion per year. Also planned is a reduction of at least 30 percent in the number of managerial positions in non-operational areas. We have about 7500 approved management functions, of which 5300 are in non-operational areas.
Our reformulation adjusts the structure and management to the vision set forth under our 2015-2019 Business Plan, the ultimate goals of which are to create value and deleverage. In addition, it extends our efforts to reinforce the control, compliance, and transparency mechanisms.
The first phase of the restructuring will result in the reduction of 14 positions in senior management. The number of departments will be decreased from seven to six with the merger of the Downstream and Gas & Power areas. The total managerial positions linked directly to the Board of Directors, the president, and the directors, meanwhile, will be reduced to 41, down from 54.
The second phase, scheduled for February, will cover the other management team positions. Appointments and team allocations will take place from March.
Accountability and compliance
Six Statutory Technical Committees will be created comprising executive managers who will be tasked with prescreenning and issuing recommendations on issues to be decided by the directors, who will share responsibility in decision-making.
Because of their statutory nature, the committees' acts will be subject to the oversight of the Securities and Exchange Commission (CVM).
There will be new integrity, technical expertise, and management analysis criteria for the appointment of executive management. In addition, the Board of Directors will be responsible for approving both appointments and terminations for these positions.
By strengthening commitment to compliance, our restructuring provides for changes in internal control over hiring and investments. Good and service procurement activities will be concentrated at the new Human Resource, SMS, and Services Department.
Investment project deployment will be centralized at the new Production Development & Technology Department (DP&T). This new structure will concentrate project deployment management and technical skills.
Hiring for investment projects, as a rule, three departments: the department of the requester, which conceives the basic technical project; DP&T, which will develop the project, and the HR, SMS and Services Department, which shall bid and contract goods and services. This redesigned project and service hiring process avoids excessive concentration in decision making.
Aiming to increase business profitability, the new model promotes area mergers to improve the use of synergies among them. Thus, Downstream and Gas & Power will comprise the Refining and Natural Gas Department.
The Exploration and Production Department will be organized per asset class, with the creation of structures for Deep Waters, Ultra-Deep Waters, Onshore and Shallow Waters, enabling the improved management of the value added by the assets and the optimization of oil and gas production.
Changes that result in amendments to our Bylaws will be submitted to the General Shareholders' Meeting to be convened in due course.
The following is our new top structure: