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Oil Report

Areva reshuffles ops to stave off split-up

PARIS, Jan 28 (Reuters) - French nuclear reactor maker Areva CEPFi.PA announced a reorganisation of its businesses on Thursday, in a move aimed to shore up its credentials as an integrated nuclear power provider that cannot be split apart.

The embattled state-owned company said it was reshuffling operations to improve synergies and customer satisfaction.

Areva has recently come under fire for losing a multi-billion euro contract to build nuclear reactors in Abu Dhabi in part because it did not tailor its offer to meet local needs.

The company has also struggled to finish a project to build next generation nuclear reactors in Finland and is embroiled in legal proceedings with its partner there over delays and cost overruns.

These setbacks have caused some members of France's business elite, including Henri Proglio the CEO of France' utility EDF EDF.PA, to question to logic of keeping Areva as a single company.

In an interview with Les Echos in November Proglio said the creation of Areva was “probably an error”. Under the new structure, Areva, which previously had three divisions, will have six -- mining, front end, reactors and services, back end, renewables and transmission and distribution.

A consortium made up of Alstom ALSO.PA and Schneider SCHN.PA is set to buy the T&D division in a deal expected to close this year.

With the loss of the Abu Dhabi contract to a Korean consortium some politicians and industry executives have called for better coordination among France’s nuclear and energy giants as they seek to maintain their global leadership in the field.

Areva said the reorganisation would better allow the group to “capitalise on the nuclear renaissance,” and has put Didier Benedetti, a member of the Executive Board, in charge of the reorganisation.

President Nicolas Sarkozy has commissioned Francois Roussely, the former head of EDF (EDF.PA), to produce an analysis on the future of the French nuclear industry. The report is due by the end of April. (Reporting by Nina Sovich; Editing by Jon Loades-Carter)

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