Meeting of the Working Group on Gazprom's intracorporate structure improvement
Gazprom’s headquarters has hosted the meeting of the working group on Gazprom’s corporate structure improvement. The meeting was chaired by Alexander Ananenkov, Deputy Chairman of Gazprom’s Management Committee, the working group head.
The meeting was devoted to realization of Gazprom’s Board of Directors decision dated March 29, 2006 approving to establish the Company’s five new subsidiaries.
The meeting participants considered and approved in general arrangement plans to establish new subsidiaries with Gazprom’s 100% ownership: Gazprom-UGS, Gazprompererabotka, Gazpromseverpodzemremont, Gazpromyugpodzemremont, Gazpromtransgaz-Kuban as well as to increase Gazprom’s share up to 100% in Gaspromtrans.
Responsible executives were appointed in Gazprom and subsidiaries from which assets are withdrawn to establish new companies and to increase Gazprom’s ownership up to 100% in Gazpromtrans.
The working group discussed issues of structural reorganization in oil production, power industry, construction and other spheres of Gazprom group activity including social one.
“According to the Board of Directors decision we start the basic stage to realize Gazprom’s reform and establish backbone and specialized 100 percent subsidiaries. The organizational and legal scheme these companies to be found ensures ability to take precise and efficient management decisions and corresponds to the approaches accepted in the international practice”, – Alexander Ananenkov has stated.
At the Board of Directors meeting dated March, 29 Minister of Economic Development and Trade Hermann Gref has stated “I wish to support the proposed reform. At the given stage this is utterly correct way. And, in my opinion, it will be positively approved by both the participants of the market, shareholders, and consumers. It is a large step to the company’s transparency”. “Separation of trunk transmission and production is what the company extremely needs at today's stage”, – Hermann Gref has declared.
Development of Gazprom’s intracorporate structure is carried out within the second stage of company’s reform and aimed at raising Gazprom’s operation efficiency as vertically integrated company and management structure optimization by the main activity at the level of subsidiaries.
As a result of the structural reform the work will be completed to separate financial flows in gas production, transmission, processing, underground storage and marketing as well as liquid hydrocarbons.
The main approach to improve intracorporate structure is to separate Gazprom’s conglomerate enterprises and consolidate profile activity in specialized legal entities as well as to single out service and social infrastructure units into separate legal entities.
On the 29th of March, 2006 Gazprom’s Board of Directors has approved proposals to reorganize subsidiaries owned solely by Gazprom with the purpose to set apart profile activities in specialized subsidiaries with Gazprom’s 100 percent share: Gazprom-UGS, Gazprompererabotka, Gazpromseverpodzemremont, Gazpromyugpodzemremont, Gazpromtransgaz-Kuban as well as to increase Gazprom’s share up to 100% in Gaspromtrans.
The scheme to realize in practice such approach supposes reorganization of operational subsidiaries. Two stages are envisioned:
- setting apart of activities and assets. Existing Gazprom’s subsidiaries ("donor" companies) allot corresponding profile assets into independent legal entities ("buffer" companies);
- consolidation of separate activities and assets. The established “buffer” companies are consolidated according to corresponding activity profiles in the course of reorganization by merger (the “main” company is chosen from "buffer" ones to join it).
In future the proposed scheme is foreseen to be used to establish other specialized companies consolidating separate aspects of service activity in Gazprom (for example, the customer service, gas filling activity, etc.).
Information Directorate, OAO Gazprom