Gazprom has acquired a 25 percent stake in its long-time general contractor Stroitransgaz, throwing into doubt plans to create its own construction subsidiary.
"It was a revelation not only to me but to others on the board," Boris Fyodorov, an independent member on Gazprom's board of directors, told investors during a conference call Wednesday. Information about the purchase came out during a marathon board meeting Tuesday.
When Gazprom's new managers assumed power last year, they made a point of ridding the company of any remnants of the old regime, personified by former CEO Rem Vyakhirev. One of these holdovers included Stroitransgaz, a construction and contracting firm with a virtual monopoly in Russia's natural gas industry.
"It looks like Gazprom management is in negotiations to increase the stake," Fyodorov added.
Although Stroitransgaz spokeswoman Valentina Smirnova couldn't confirm the acquisition, she said such information made its way to Stroitransgaz management in the beginning of August.
In reaction to the rumors, Stroitransgaz sent a request for an updated list of shareholders to registrar ROST and is still awaiting a response.
"It's difficult to say what it will mean for our relationship with Gazprom," Smirnova said. "First, we have to be convinced that it's true. Our priority right now is to maintain our business partnership."
Gazprom projects, which range from the Blue Stream gas pipeline to Turkey to the giant Zapolyarnoye field in Siberia, account for 80 percent of the contractor's revenues. Not only has Stroitransgaz benefited from this largess financially, the firm has been able to accumulate invaluable experience and skilled employees that no domestic company can rival.
The new Gazprom management earlier this year said it would try to break this mutual dependence by creating its own construction subsidiary. The difficulty and expense of such an undertaking became clear at Wednesday's board meeting, Fyodorov said.
"It makes sense to take over Stroitransgaz because it's the only company that has enough workforce and experience," he said, adding that creating an entirely new subsidiary seemed redundant in light of the acquisition.
The move will make it easier for Gazprom to improve its infrastructure and efficiency if it works through Stroitransgaz, said Krisztina Kovacs, a natural gas analyst at Deutsche Bank.
"It's a lot easier to build onto a new structure based on an existing company than starting from scratch," Kovacs said.
Buying Stroitransgaz, however, isn't a new idea. It's more like reinventing the wheel. In shunning the ways of Vyakhirev and former Stroitransgaz president Arngolt Bekker, CEO Alexei Miller is recreating the now-defunct Natural Gas Ministry, from which both the gas monopoly and the contractor sprung.
The original shareholders of Stroitransgaz came from Vyakhirev and Bekker's extended family of gasoviki, or Soviet-era gas field workers. It has been reported that new Gazprom managers loathed the old guard and pressured them to sell their Stroitransgaz shares. Those that could have possibly sold out include Vyakhirev's daughter Tatyana Dedikova, sons of Viktor Chernomyrdin, who is Gazprom's founder and Russia's current ambassador to Ukraine, and Bekker himself, who earlier said he owned 20 percent of the company.
Gazprom also took Stroitransgaz to court to seize 4.8 percent of its shares held on the contractor's balance sheet. Both sides have decided to settle out of court, and the lawsuit is unrelated to news of the acquisition, Smirnova said.
In other news, the Gazprom board approved a 5 billion ruble-denominated, three-year bond this year but delayed a decision on whether to issue a Eurobond.
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