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. Last Updated: 07/27/2016

Analysts Say Vyakhirev Likely to Stay as CEO

Rem Vyakhirev, chief executive of gas giant Gazprom, is expected to remain in place for another six months to a year, although his wings are likely to be clipped, analysts said Monday.

Most sector specialists expect Vyakhirev to win re-election at a board meeting Wednesday, the day before his contract expires. It is believed that President Vladimir Putin wants to oust him — to increase Kremlin control over Gazprom — but there is a shortage of suitable replacements.

"A couple of months ago I was pretty sure Vyakhirev was on his way out, today I don't have that certainty," NIKoil analyst Gennady Krasovsky said.

Gazprom accounts for around 8 percent of Russia's gross domestic product and around a fifth of federal government tax revenues, and so wields considerable clout in parliament and the government.

The government's silence on Vyakhirev's fate is seen lending credence to the theory that he will survive in some form for a few more months, although few doubt he will eventually go.

"I think he'll stay on as Gazprom head for a while, but I don't think he'll be there at the next shareholders meeting in 2002," Troika Dialog analyst Ivan Mazalov said.

Boris Fyodorov, a Gazprom board member who has been fiercely critical of Vyakhirev's leadership and record on financial transparency, believes the chief executive will survive Wednesday's meeting in name but have to relinquish his power to one of his deputies or a government representative.

"The fundamental decision on Vyakhirev was taken long ago, all that remains now is to see how radical the action will be," Fyodorov said during a conference call Friday.

There are 11 places on Gazprom's board, and the government's 38.37 percent share in the company gives it the right to select five of them.

Gazprom's management controls four of the remainder, while Germany's Ruhrgas and Fydorov — who represents the interests of minority shareholders — have one each.

Energy sector analysts said the process of reining back Vyakhirev began last year, when he started to implement government policy instead of making his own decisions.

"To some extent he's already only technically the head of the company," a Western bank analyst said.

He said Vyakhirev may have won his reprieve by silencing the critical voice of the independent television network NTV. Gazprom used NTV's debts to engineer a boardroom coup at the TV network in April, which critics interpreted as a move to muzzle a Kremlin critic.

"The state wants to see Vyakhirev as just a figurehead. If he's willing to accept that, there's no point in changing him," said Krasovsky at NIKoil, adding that Vyakhirev in that role would be good for the company.

But Valery Nesterov at Troika took a different view.

"It would be bad for minority shareholders, structural reform, financial transparency and even for Putin's image," he said.

Analysts said the government would continue to try hard to find a successor for Vyakhirev.