Board of Directors considers cost management and optimization by Gazprom


A meeting of the Board of Directors is underway at the Gazprom Headquarters.

The Board of Directors considered the information on cost management and optimization by Gazprom.

The Management Committee was tasked with streamlining cost management in order to enhance the effectiveness of the Company’s activities. The Board of Directors will be informed on the progress in implementing this work in the 2nd half of 2009.


In 2007 the growth rates of Gazprom ’ s operational costs were at the inflation level, which demonstrates positive results of the cost management activities.

Gazprom ’ s cost management activities are focused on the following main areas:

  • introducing sci-tech achievements, energy-saving equipment and technologies;
  • building the standards related to staffing, labor inputs and resource consumption;
  • elaborating expert reviews of the projects included in the Gazprom ’ s Investment Program;
  • coordinating prices for the major kinds of material and technical resources and services;
  • restructuring Gazprom ’ s subsidiaries;
  • transferring social facilities ownership to local authorities;
  • introducing tender procedures.

Cumulatively, these activities ensure a tangible economic impact. In particular, utilization of up-to-date and feasible technical solutions lowers capital investments into construction of new gas pipelines by at least 20 per cent. Expert reviews of the projects included in the Gazprom ’ s Investment Program may results in reducing the cost estimates for the facilities construction by up to 18 per cent. Coordination of the wholesale prices for the major kinds of material and technical resources and production services enable to make the prices for the material and technical resources being used by Gazprom fall behind the indicators set by the Russian Economic Development Ministry for various industries.

Special attention is given to creating an integrated information space of Gazprom Group based on the state-of-the-art information technologies in line with the Informatization Strategy approved by the Company ’ s Management Committee.

Furthermore, Gazprom annually adopts and implements Cost Optimization (Reduction) Programs. They are aimed at determining and evaluating the cost reduction reserves in a number of operation spheres of Gazprom and its subsidiaries, as well as defining a set of specific measures to utilize such reserves. The implementation of measures in line with the Cost Optimization (Reduction) Program resulted in saving RUB 14.2 bln in 2007 and is supposed to save RUB 10.1 bln in 2008.

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