Today, the Radisson Slavyanskaya Hotel’s Conference Hall has hosted a Workshop on ‘How to Become a Gazprom Supplier’ co-organized by Gazkomplektimpex and the Association of the Oil and Gas Equipment Manufacturers.

Attending the event are top managers and experts from Gazprom’s structural units, Gazkomplektimpex, Gaztechleasing and representatives of more than 200 Russian companies turning out various products for the oil and gas industry needs.

On opening the plenary session, Valery Golubev, Member of Gazprom’s Management Committee, Head of Gazprom’s Investment & Construction Department, Director General of Gazkomplektimpex reported on Gazprom’s investment activity and intra-corporate regulations surrounding the selection of suppliers of goods & services and contractors.

Valery Golubev emphasized that tenders were first launched by Gazprom in 1995, with the Tender Committee awarding competitive contracts for the construction of the Yamal-Europe, Blue Stream, Zapolyarnoye-Urengoy and Northern Tyumen Region - Torzhok gas pipelines.

The Member of Gazprom’s Management Committee stated that the Company was aggressive in promoting cooperation with domestic producers of oil and gas equipment. “In an effort to meet our standards and requirements inland manufacturers face the need of diversifying the output range and improving its quality. Our joint activities have resulted in a steady trend towards reducing the share of import purchases by Gazprom. At present, the Company domestically acquires not less than 90 per cent of overall products needed,” V. Golubev said concluding his speech.

Felix Lyubashevsky, Co-Chairman of the Association of the Oil and Gas Equipment Manufacturers noted: “The largest inland investor Gazprom and Russian manufacturers are successfully building partnership ties. I’ am positive that contest-based contracts being aggressively applied by Gazprom are a great stimulus for the country’s industrial expansion.”

The Workshop will host roundtables for suppliers of goods and services.

Reference:

Gazprom’s Contest Commission was established in June 2003. The Provision on Gazprom’s Contest Commission was ratified in September 2003.

The Provision on preferentially contest-based awards of contracts on supply of goods, completion of works and rendering of services for Gazprom and its subsidiaries was endorsed by Gazprom’s Board of Directors in July 2004.

Under the Provision, tender procedures are organized by the Contest Commission (which arranges for and coordinates contest-based awards of contracts by Gazprom’s administrative units and subsidiaries) and by the Tender Committee or its subsidiaries’ tender committees (executive bodies formed by tenderees).

In 2004, Gazprom’s procurement for intra-corporate needs totaled RUR 111 bln, with roughly the same amount slated for 2005.

The contest-based procurement will keep growing and is expected to reach 80 per cent of the total purchases by 2006.

To optimize the corporate investment management, Gazprom set up the Investment & Construction Department in charge of an integrated investment chain being built in the following way:

 - At the pre-investment stage, Gazprom drafts the corporate strategy and long-term development programs; develops, provides expertise for and endorses investment viability reports; looks into options of and decides on how to apply major technological equipment.

 - At the investment stage, the Company holds competitive bidding to select performers of work and suppliers of goods; based on the contest results, develops projects subject to public and industry expertise and Gazprom’s approval. Subsequently, Gazprom makes up a list of investment projects over a 3-year period and an annual investment program pending endorsement by the Company’s Management Committee and Board of Directors.

Thus, Gazprom’s investment program is substantiated based on the outcome of openly-held contests and tenders on the supply of goods & services and exposes a real market situation of the corporate operation and industry development.

To slash import costs, the Company has come up with an import replacement program for 2005-07, aimed at providing domestic producers, the military and industrial complex inclusive, with access to the data on the industry’s needs in such output and its technical and economic standards.

While in 2002 Gazprom imported from West Europe 14.2 per cent of overall equipment purchased, in 2004 that figure went down to 3.5 per cent. Another seven per cent is imported from inside the FSU. Over 40 per cent of overall corporate foreign acquisitions are gas pumping units, pipes and gages.

Gazprom has been always active in organizing and funding the production of home-made equipment, with some RUR 10 bln invested over the past decade only.

A Gazprom wholly-owned subsidiary, in 2002 Gazkomlektimpex became a centralized supplier of goods and services for the Gazprom Group of companies.