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. Last Updated: 07/27/2016

Gazprom Neft Adopts a New Plan

Gazprom Neft said Tuesday that it appointed Yury Baidukov, formerly a vice president at Schlumberger, to manage the company's oil services assets.

Baidukov will be responsible for developing a new strategy for Gazprom Neft's oil services business, the company said in a statement.

Baidukov will head Gazpromneft-Nefteservice, which was founded in September to oversee Gazprom Neft's oil services assets, the company said.

Gazprom Neft CEO Alexander Dyukov said in a statement that the company would invest $4 billion per year to 2020, or around $50 billion, to double oil output.

The oil producer, the country's fifth-largest, has been fighting declining production since its former owner, billionaire Roman Abramovich, sold the firm, then called Sibneft, to Gazprom in 2005.

The company, which in 2006 produced around 43 million tons of oil, including its share in oil venture Slavneft, approved last year a development strategy, which envisions production growth to at least 80 million tons by 2020.

"We estimate that the plan will require an average of $3.5 billion to $4 billion of investment per year," Dyukov said.

Capital investment will amount to more than 60 billion rubles ($2.4 billion) this year.

Dyukov said he expected Gazprom to transfer the right to develop all of its 11 oil deposits to Gazprom Neft within the next two to three years, which might help boost production. Gazprom Neft has not acquired a single major asset since approving its ambitious growth strategy.

Analysts have said they suspect that the Kremlin has decided that Gazprom should focus on gas while the state will increase its grip over the oil industry via state-controlled Rosneft.

Dyukov said Gazprom Neft was still considering acquisitions. "We have not changed our mind and are going to acquire new assets as soon as we get attractive offers, including former Yukos assets if they are resold by their current owners."

(Bloomberg, Reuters)