Rusneftegaz can announce that following an internal review of our internal management structure, numerous changes are set to be made in due course to the constitution of our senior personnel. Whilst the current board of directors, most of whom were appointed early last year, are generally satisfied with the work being undertaken by our staff, there is collective agreement that certain areas of our administrative departments are not operating at maximum efficiency. Therefore, it has been perceived that it is now necessary to take remedial action to prevent further long-term deterioration in our company work ethic and broader corporate standards. Thus, Rusneftegaz can disclose that the position of the Director of Personnel has been terminated with immediate effect, and will not be reappointed. Similarly, the post of Director of Accounting will be abolished upon the retirement of the current officeholder, Dmitry Golubev, at the end of 2016. In response to this disclosure, the Deputy Chief Executive Officer, Aleksandr Filyurin commented:
“It is always disappointing when any member of our staff has to leave. However, in this case, it has been necessary to act in the long-term interests of Rusneftegaz. We have been working her for over one year now, and this gave adequate time to see what is working and what is not. To be direct about this, the administrative department of Rusneftegaz is “bloated”, and we found a lot of staff did not accomplish as much as they could on a day-to-day basis. It is important to point out that we do not need to make these cuts; our projections for this year and next year are already looking good. It just comes down to instigating a strong corporate culture, a strong work ethic. If we do not instill these virtues now, how long will it be until standards begin to decline? It is not a risk we wanted to take. As I said before, it is disappointing to lose any member of our team, but fundamentally we are doing what is right.”
The developments published in this release form part of a wider plan by the board of directors to reduce the number of managers within our organization, and consolidate the existing staff hierarchy accordingly. Not only will this provide greater efficiency, accountability and transparency, but it shall also yield a major reduction in remuneration costs. Although the majority of this will derive from a fall in managerial wages and associated expenses, these savings will also be partially attributable to a nominal number of redundancies in other administrative roles. Rusneftegaz intends to consult on this in the near future at an appropriate time, and it is expected that almost all departures will be voluntary. Under the terms of the revised arrangement, all the work conducted by our accountants and internal auditors will now be supervised by our Chief Financial Officer, Mikhail Avdeyev, and is anticipated to continue as normal. Likewise, most of the functions performed by the personnel department will be transferred to the direct control of the executive office, where it shall be overseen by the Deputy Chief Executive Officer, Aleksandr Filyurin. In certain circumstances, the resolution of any serious employee issues that arise will be delegated to a third party outside the control of Rusneftegaz, primarily to guarantee that any concerns regarding conflict-of-interest are avoided and thus good corporate governance is maintained. Moreover, whilst almost all these activities will continue to be arranged in Moscow, certain functions will now be assigned to regional offices and managers, depending on their capability to manage such affairs. These particular changes ultimately form part of a key tenet in Rusneftegaz’s corporate philosophy to promote localization of business in developing regions of the Russian Federation. Further information regarding this announcement will be communicated internally to our staff, and we will not be accepting any external questions pertaining to this restructuring. We necessitate your cooperation and understanding with this important matter.
