GAZPROM CAST THE NET
Dmitry Butrin
Kommersant, 03.19.2004
Alexey Miller presented a Program on a new phase of Gazprom’s restructuring.
At a meeting held yesterday at Gazprom’s Headquarters Alexey Miller, Gazprom’s Management Committee Chairman, presented a Program on a new phase of Gazprom’s restructuring. Until 2004 Gazprom will have all its gas transmission units “cleared” of non-core business, thus, putting the gas transmission system under control of wholly-owned companies. By commencing a new reform phase, Gazprom will obtain an opportunity to avoid attempts from the Government to restructure the company on its own.
The meeting dedicated to the changes in Gazprom, was attended by almost all the Deputy Chairmen of the Company’s Management Committee and heads of gas production and transmission subsidiaries. The meeting focused on the report prepared by the working group for developing Gazprom’s corporate structure and presented by Alexey Miller and his Deputy Alexander Ananenkov. According to Sergey Kupriyanov, Deputy Head of Gazprom’s Information Department, the meeting approved the draft reforms to be conducted this year. According to Alexey Miller, the main problems discussed related to finalizing the 1st phase of Gazprom’s restructuring (during which the company "resolved the issues of developing the governance structure, regulatory procedures and the parent budgeting system") as well as to initiatiating the 2nd reform phase, namely "optimizing the subsidiaries’ core business management structure".
The reforms basically pursue the objective of establishing separate entities not directly involved in maintaining the gas main network, within 17 Gazprom’s subsidiaries mainly dealing with gas transmission. In particular, a number of low-pressure networks nowdays controlled by Gazprom’s gas transmission affiliates, will be transferred under Regiongazholding’s management; well maintenance otlets will enter gas extraction companies; repair and service units will be converted into independently-run "daughters". The UGS facilities are planned to be put under control of a separate structure and it may very well be that they will be accessed on a commercial basis. Finally, the gas transmission subsidiaries’ social facilities are planned to be handed over to an integrated target-unprofitable company. At the same time, Gazprom will set up gas pipeline maintenance units within its gas production affiliates with the view of including the former into the gas transmission companies. Thus, 17 Gazprom’s gas transmission companies will only focus on gas transmission by 2005.
It can be very well assumed that the second-phase reform decision was adopted by Gazprom beforehand and was timed for the conclusion of the presidential elections. According to a Troika Dialogue expert Valery Nesterov, “the confrontation around Gazprom’s restructuring has somewhat smoothed down and the company is conducting the reforms under a scheme devised, which does not envisage for any sort of desintegration”. The second phase of restructuring has been launched at a very approriate moment. The Economic Development and Trade Ministry (EDTM), Alexey Miller’s long-time opponent, is obviously too busy now to focus on Gazprom and it is a great deal harder to object to the Gazprom’s restructuring proposals approved already than to lobby one’s own initiative. A EDTM source told yesterday Kommersant that the Ministry had not been informed of the meeting.
Independent gas producers consider the reform to be a positive factor. “If it leads to easing the gas producers’ access to the gas infrastructure and to the pricing transparency in the gas transmission services, we can’t but only welcome it,” – Evgeny Ostapov, ITERA’s press secretary was quoted by Kommersant as saying. Mikhail Lozovoi, NOVATEK’s chief spokesman, believes that by “clearing” the gas transmission sector, the company will hopefully be able to establish a fund attraction system, to be channeled for upgrading gas transmission networks and expanding their capacities.
Dmitry Tsaregorodtsev, an expert with the Prospect Investment Company, believes that Gazprom’s actions will be percieved by the gas market representatives as "unexpected and extremely unfavorable for the company’s development". In his opinion, the gas transmission separation will allow to more precisely determine the gas transmission tariffs and since the bulk of the business being withdrawn from the gas transmission companies is non-core, it will eventually be sold off by Gazprom.