On 14 January the Naftogaz executive board approved a new business model implementing the group’s corporate strategy.

This new business model requires the creation of core business divisions within the group - Integrated Gas Business (hereinafter gas division) and Oil Business (hereinafter oil division). Andrew Favorov was appointed head of the gas division and Mykola Havrylenko as head of the oil division.

The gas division will include the following business units:

• JSC Ukrgazvydobuvannya (excluding refining and sales of oil products);
• Gas of Ukraine Subsidiary Company;
• Naftogaz of Ukraine Gas Supply Company LLC;
• Naftogaz Trading Gas Supply Company LLC;
• Naftogaz Teplo Gas Supply Company LLC;
• Naftogaz Trading Europe AG;
• Tsentrgaz, JSC Kirovogradgaz subsidiary;
• NJSC Naftogaz of Ukraine units: gas balance, dispatching, metrology and metering department, gas sales department; gas imports and customs clearance unit; gas trading unit.

Gas transmission function, which is to be unbundled from Naftogaz, is not included in the gas division.

The oil division will comprise:

• JSC Ukrtransnafta;
• JSC Ukrspetstransgaz;
• Ukravtogaz Subsidiary Company;
• JSC Ukrgazvydobuvannya units: sales department; gas and condensate refining branch.

In line with the new business model, several more divisions responsible for other key and auxiliary business processes at Naftogaz group will be established in future.

These new divisions are neither legal entities nor units of legal entities. Heads of divisions will be appointed by and accountable to the Naftogaz executive board. The Naftogaz CEO will supervise the heads of divisions.

Heads of divisions will be entitled to submit their proposals when appointing or dismissing chairpersons and members of executive boards of business units incorporated in their respective division.

Heads of divisions and business units will be responsible for performance in their respective areas.

“The new management structure of Naftogaz group’s business will significantly improve performance in all areas and provide effective control over managers. We expect the new organizational structure will help to increase profits, cut losses and increase the company’s value for our ultimate shareholder – the people of Ukraine,” commented Naftogaz CEO Andriy Kobolyev.