Naftogaz Group Continues Its Transformation and Creates Upstream and Commerce Divisions in Accordance with International Best Practices

May 12, 2020 | Category: Official
Naftogaz Group Continues Its Transformation and Creates Upstream and Commerce Divisions in Accordance with International Best Practices

As part of the transformation, Naftogaz Group abolished the Integrated Gas Business division and instead created the Upstream division and the Commerce division.

The dissolution of the Integrated Gas Business division is due to the need to adapt the structure to new market conditions and focus on gas sales to end consumers after the abolition of the Regulation on Imposing Special Duties from July 1, 2020. Among the prime functions of the Commerce division are the development of the gas retail segment, the development of trading activities and the construction of effective natural gas sales outlets. The Upstream division will be responsible for the exploration and production of natural gas and liquid hydrocarbons, effective investments and increase of proven reserves in the Naftogaz portfolio.

“Naftogaz is committed to becoming a strong company with sound corporate governance and to carrying out activities according to international standards. The separation of hydrocarbon production and sales activities is among the best practices of international oil and gas companies. This is a proven model that has proven its effectiveness worldwide. I am sure it will prove its effectiveness in Naftogaz. Within the group there will be two teams and two leaders. They will each focus on their field of responsibility. Thus, we want to increase efficiency,” so Otto Waterlander, Chief Executive Officer of Naftogaz Grouр.

“The creation of two new divisions is the next step towards the transformation of Naftogaz Group. By separating production, we increase managerial control over the maintenance and increase of our own gas production and the resource base. In turn, we expect from the Commerce division to develop trading operations and a relatively new business - direct sales of gas to customers. I am sure that these changes will allow us to successfully fulfill the tasks assigned to the company and once again prove that Naftogaz Group has been and remains the leader in changes in the state corporate sector,” said Andriy Kobolyev, Chairman of the Board of Naftogaz Group.

The Upstream division is headed by Oleksandr Romanyuk, who had previously held the position of First Deputy General Director of Ukrgasvydobuvannya. In his new position, he will be responsible for developing the division’s strategy and business plan, approving investment projects and budgets, managing operational activities of production units within the framework of the agreed strategy, budget and investment plan, appointing and dismissing employees, as well as for addressing occupational safety issues.

Olena Kobets was appointed CEO of JSC Ukrgasvydobuvannya, a key upstream asset of Naftogaz. Before that for almost five years she headed the legal direction of the company as a Chief Legal Officer and a member of the Board.

As the CEO, Olena Kobets will be responsible for interacting with shareholders and the company’s compliance with legal and fiscal legislative requirements, compliance with the standards and procedures of the Group and authorization of contracts, as well as ensuring the functioning of corporate governance. Moreover, she will be representing JSC Ukrgasvydobuvannya as a legal entity.

“In accordance with the logic of transformation, key strategic decisions on business development will be made at the level of divisions, and operational work will be concentrated at the level of enterprises having appropriate expertise. Oleksandr Romanyuk has already made a great contribution to the increase in production, technical reequipment, restructuring of processes and struggle against abuse in the production block. He has expertise in gas production and will be able to effectively push further reforms. Olena Kobets participated in the transformation of corporate functions and the development and implementation of strategic projects. I am sure that her expertise will help establish effective interaction between the directors of divisions within the company,” concluded Andriy Kobolyev.

The head of the Commerce division will be appointed and announced later.