GAZPROM STARTS ON SELF-RESTRUCTURING PATH

Pyotr Orekhin
Nezavisimaya Gazeta, 26 May 2004

The Government seems to be a passive onlooker to this process

Gazprom has recently announced its first steps to reform the intra-corporate structure. Under the Company’s plans, its gas distribution assets will be amalgamated within the Mezhregiongazholding subsidiary. According to Alexander Ryazanov, Deputy Chairman of Gazprom’s Management Committee, the projected holding company’s asset value is estimated at RUR 22 billion, with its turnover likely to amount to USD 2 billion. In addition, “the firm (id Mezhregiongazholding – NG) is likely to be listed on a Russian stock exchange over several years,” - added Alexander Ryazanov (in the meanwhile, Mezhregiongazholding’s 99% of shares are planned to be owned by the Gazprom-controlled Mezhregiongaz company). According to NG’s sources within Gazprom, a string of new structural changes is yet to come: certain gas transmission decisions are to be adopted until this year-end. Thus, the Gas Monopoly, without waiting for the Government’s resolutions, launched on its own intra-corporate reforms that might end up in the situation when the Ministers’ Cabinet would be ready to address the gas reform but the only thing to be done would be agreeing with what Gazprom had already initiated.

“As for the gas mains, we’ve so far been carrying on this business through 17 separate gas transmission companies. But the problem is that they are also engaged in gas production and processing and most of them own social and underground gas storage facilities. We intend to leave them up carrying on their core business, with respective decisions to be made this year already. As a result, we must end up having independent transmission firms that will allow us to develop a comprehensible cost structure in this sector,” – NG was told by Sergey Kupriyanov, Deputy Head of Gazprom’s Information Department.

Gazprom seems to have decided not to wait until the Ministers’ Cabinet bestirs itself and comes up with a decision. “The present-day situation around this is that the discussion of the matter is being constantly postponed. But we perfectly understand what kind of challenges we’ve got to meet and, by the way, we are already tackling a handful of tasks set by some Ministries, including our business unbundling. I’d like to underscore, however, that we’re not talking here about Gazprom’s disintegration but its development as a vertically integrated company,” – Sergey Kupriyanov was quoted by NG as saying.

We’d like to remind you that the Gazprom’s restructuring matter was submitted to the Government long time ago but hasn’t been appropriately addressed so far. Andrey Sharonov, Deputy Economic Development and Trade Minister, has recently identified the matter consideration deadlines, pointing to the Government’s intentions to do it somewhere in Mid-July. However, taking into account the fact that Premier Mikhail Fradkov has the habit of looking into everything on his own, the issue may be delayed until a later date this time again. Judging by Gazprom’s latest moves, the reform, in the meanwhile, is advancing at full speed. The Government seems to acknowledge it, as well. “Miller’s acting just like a Soviet-era intelligence officer moving in the right direction without making a lot of noise about it,” – German Gref, Head of the Economic Development and Trade Ministry said not long ago. Gazprom’s self-reforming might surely be a good thing but the company is obvious to move along the path only meeting its corporate aspirations that won’t necessarily coincide with those of the State. Having been lastingly delaying the gas reform issue consideration, the Government has virtually lost control over the situation. The only thing left to be understood here is whether this was a deliberate action or not.