Gazprom on the Background of External & Internal Challenges - The Struggle for Gazprom Restructuring Expected to Revitalize in 2020 -

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The year 2019 was rather nervous for Gazprom.

There was a significant reshuffle in the company for the first time since 2011 that affected main directions of business and that continued the internal restructuring of divisions responsible for key construction projects and the procurement system.

The show titled The Future of Gas Transit through Ukraine continued throughout the whole year and ended with the signing of contracts just on December 31. It was accompanied by fierce battles around the TurkStream and the Nord Stream 2. As a result, the former will be launched on 8 January 2020, and the latter was subjected to American sanctions at the end of 2019 - as a result, it has 160km of the two lines not laid yet. In the meantime, a serious breakthrough took place in the eastern direction - the Power of Siberia was put into operation marking the first serious step towards diversification of Russian piped gas exports.

Positions of Aleksey Miller, whose dismissal was predicted throughout the whole year, strengthened - he actually managed to prevent the appointment of outsiders to top posts at Gazprom and even got rid of some disloyal colleagues in the management board. He is unlikely to leave his post before the Nord Stream 2 story is over - on the contrary, he has a chance to demonstrate his managerial skills in countering the sanctions.

Gazprom reinforced its positions on the Russian market on the background of problems of independents that kept struggling to maintain the production of natural gas for domestic consumers. Attempts to start the deep restructuring of the sector in favor of independents were suspended.

However, the struggle for Gazprom restructuring will revitalize in 2020. It will also include the question of liberalization of piped gas exports.

The report will elaborate on the following issues:

  • Gazprom's new administrative structure
    • Main changes in the top management, their administrative and substantive components
    • Restoration of the unity of the exports division
    • The new investment and procurement division and consolidation of construction assets
    • Reforms in the sphere of sales and in the financial division
    • HR successes and failures of Aleksey Miller
  • Gazprom on the domestic market
    • The situation around the production of hydrocarbons
    • Growth in gas demand and problems of independent producers
    • The decline of the exchange trade
    • Pricing and domestic revenues of Gazprom
  • Gazprom on the European market
    • Competition with LNG and decrease in prices s
    • Struggle for new potential niche
  • Ukraine gas transit and bypassing gas pipelines. Analysis of the latest contracts with Ukraine
    • Successes and difficulties in the creation of the new transmission infrastructure
    • The future of gas supplies to Europe and Turkey
  • The Power of Siberia and the Chinese market
    • Prospects of expansion of exports to China
  • Gazprom's financing standing and new investment priorities
    • The situation around revenues of the company
    • Gazprom's debt burden and new dividend policy
    • The stake on gas chemistry
    • The path from pipes to LNG
  • Medium-term forecast of developments: HR, structure, exports, and finances

Key Topics Covered:


Chapter 1. HR revolution at Gazprom

1.1. Consolidation of foreign economic division

1.2. Sales division. Relocation of Kirill Seleznev

1.3. Redistribution of powers. New investment and procurement division

1.4. From production to Gazprom Nedra

1.5. Changes in financial division, consolidation of construction assets

1.6. New administration structure at Gazprom

Chapter 2. Gazprom on the domestic market: fragile status quo

2.1 Expectation of record-high output amid slower production growth

2.2 Supplies to the domestic market, the exchange depression

2.3 Pricing and revenues of Gazprom on the domestic market

Chapter 3. European market: overproduction and transit risks

3.1. Gazprom on markets of European states. Competition with LNG

3.2 Turkish market, TurkStream

3.3 Ukraine gas transit prolongation

3.4 Nord Stream 2, TurkStream: USA declares sanctions to Europe

Chapter 4. Power of Siberia, access to the Chinese market

4.1 Power of Siberia: the launch of new project of the century

4.2 Amur gas processing plant, Amur gas chemical complex

4.3 Situation on the Chinese market: looking for domestic reserves

Chapter 5. Financial standing of Gazprom after completion of big construction projects

5.1. Exports to Europe let profits down

5.2. Capital investments of Gazprom Group, investment program: from transportation to processing

5.3. Debt burden, the new dividend policy of Gazprom

Chapter 6. Medium-term forecast of developments

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