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. Last Updated: 07/27/2016

Report: Gas Giant to Be Revamped

Gazprom's board will this week consider an ambitious reform plan to split its extracting, processing and pipeline units, Vedomosti reported Monday.

A draft of the reform plan obtained by the newspaper calls for restructuring of 17 subsidiaries that account for around 80 percent of Gazprom's business, creating functional departments such as processing, transport, storage and maintenance.

That would change Gazprom from a grouping of localized companies to a structure comprising a few units, each focused on one part of the business of producing and selling gas, allowing managers to assess the performance of each area more easily.

Vedomosti said the reform, which aims to boost the company's transparency, would take up to two years and cost 598 million rubles ($21.54 million).

Under the reform, the world's largest gas firm would regroup the noncore functions of the 17 subsidiaries, such as gas processing and underground storage, into six specialist "buffer units" that would then be integrated into the main company. The 17 subsidiaries would keep their core exploration and production functions.

A source in the company told Vedomosti Gazprom would retain full control over the new units.

Analysts say the bureaucratic character of Gazprom, a vast firm descended from the Soviet gas ministry, is a major drain on efficiency and cash and have long called for improvement.