Gazprom’s Headquarters hosted yesterday an ordinary meeting of the Working Group for Gazprom’s intra-corporate governance structure improvement, presided by Alexander Ananenkov, Deputy Chairman of Gazprom’s Management Committee.

The Working Group debated proposals related to the elimination of non-core businesses from Gazprom’s production and transmission affiliates.

Special emphasis was laid on the issue of gas processing asset consolidation within Gazprompererabotka, an integrated 100% Gazprom subsidiary. According to the meeting participants, setting up the new company will contribute to increased transparency of financial flows in the hydrocarbon production and transportation sectors.

The meeting largely approved the Main Principles of capital construction in Gazprom as well as particularly focused on restructuring the intra-corporate contractors’ service and construction complex.

The Working Group’s relevant proposals are due to be submitted for Gazprom’s Management Committee’s reviewal.

Reference:

Gazprom’s intra-corporate governance structure is being improved within the 2nd phase of the Company’s restructuring aimed to enhance Gazprom’s business efficiency, as a vertically integrated company and to optimize core business governance structure at the subsidiaries’ level.

The main objectives of the 1st stage of intra-corporate reforms, including improvement of the governance structure, regulatory procedures and budget planning system at the parent company’s level have been largely met.

As a result of said structural changes, Gazprom will complete the work targeted at unbundling financial flows in the gas and liquid hydrocarbon production, transportation, processing, underground storage and marketing sectors.

In addition to the consolidation of core businesses, the Company intends to set up maintenance agencies, distribution networks and social infrastructure facilities as independent units as well as to separate technological and commercial communications services.

The reforms are expected to allow Gazprom to have absolutely transparent gas production, transmission and marketing costs, which is important for setting reasonable transportation tariffs. The core business asset consolidation will enhance the efficiency and quality of management of all Gazprom’s subsidiaries.

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