Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Kremlin Puts Man in Gazprom

Gazprom on Monday replaced its chief financial officer with a government official, in a surprise move that analysts said would tighten the Kremlin's grip on the firm's finances.

Gazprom said in a statement that chief executive Alexei Miller had appointed Boris Yurlov, a member of President Vladimir Putin's administration, to replace Vitaly Savelyev, referred to by some analysts as Miller's closest ally.

Gazprom, the world's largest natural gas producer, declined further comment.

"The appointment of a new CFO will definitively boost the role of the Kremlin and Putin in the company," said Renaissance Capital analyst Vladislav Metnyov.

Yurlov has worked as the first deputy head of the Kremlin's property department since 2000.

The government is currently overhauling the finances of state-controlled monopolies such as Gazprom, which accounts for 8 percent of gross domestic product and a quarter of budget revenues, and whose accounts have suffered from years of neglect.

Some analysts were surprised by Yurlov's appointment, saying Savelyev had helped Miller make Gazprom more transparent and more profitable, but Metnyov said the decision appeared to be linked to personal differences. "They didn't work well together. There was an internal conflict. What caused it is difficult to explain," Metnyov said, adding that differences could have emerged over tactics to regain assets sold off by the company's previous management.

Before joining Gazprom last September, Savelyev worked in one of Russia's largest banks, Menatep St. Petersburg.

"Savelyev has built a solid financial strategy, Gazprom is showing good financial results, cutting costs," said Valery Nesterov from Troika Dialog.

Gazprom's market capitalization grew to $27 billion from $8 billion over the past year.

Metnyov also noted that Savelyev had been behind the successful placement of a $500 million Eurobond and had been actively switching from short-term to long-term loans. "He was also involved in Gazprom's successful strategy to regain assets lost under the previous management," he said.

However, Metnyov and Nesterov said Yurlov's financial background was also impressive. Before moving to the Kremlin he headed the project financing department in Russia's largest bank, Sberbank.