Roayl Dutch Shell is reogroanzing its upstream division ahead of its pending $70 billion merger with UK-based BG Group.

The company said on Tuesday that its integrated gas business will now become a stand-alone organization, a move the company said reflects the unit’s “enlarged scale and investment potential.”

The integrated gas business has generated an average cash flow of $11 billion per year since 2011, up from about $2 billion in 2009.

The business will be led by Maarten Wetselaar, who will become Integrated Gas Director and a member of the executive committee.

Shell will also streamline its global upstream activities and establish a new organization dedicated to unconventional resources.

“A new Upstream organization will span Shell’s world-wide conventional oil and gas businesses,” the company said.

The organization will be led by current Upstream International Director Andrew Brown.

Marvin Odum, currently Upstream Americas Director, will lead and become the director of the unconventional resources organization that will focus on heavy oil and shale activities in the Americas.

The unconventional resources organization will be responsible for on-going portfolio reviews and “investment opportunities in these longer term themes” and will also be charged with winding down Shell’s activities in offshore Alaska.

The changes will come into effect on January 1, 2016.

Shell boosted its expected level of identified and reported on pre-tax synergies tied to the BG Group merger up to $3.5 billion in 2018, an increase of 40 percent compared to its earlier guidance.

“This increase is attributable to a doubling of expected operating cost savings from $1 billion to $2 billion and underscores the attractiveness of the recommended combination for both sets of shareholders,” Shell said.

The company added that the expected level of identified pre-tax synergies is now $2 billion of operating cost savings and a $1.5 billion reduction in exploration expenditure in 2018.

Shell expects the 2018 exploration spend for the combined group to be less than $3 billion, a 40 percent reduction from 2014 levels on a combined Shell and BG basis.

The merger is on-track to be completed sometime in early 2016, Shell said.

Shell said it expects to complete $20 billion in asset sales for the 2014 to 2015 period and it has planned a further $30 billion in asset sales to take place between 2016 and 2018, following the completion of the merger.

The company also confirmed that it has reduced its staff and direct contractor headcount by 7,500 positions this year.

“Shell is pulling all levers to manage through the current oil price downturn, underpinning our intention to continue to pay attractive dividends for shareholders,” the company said.


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