Following extensive talks with a number of our key stakeholders over the past six months, it has been resolved that we will organize a comprehensive review into our current corporate structure, ultimately contemplating both the extent and nature of any changes that could be formalized in the future. This has been instigated at the request of our majority shareholder, which has asked our board of directors to form an exploratory committee with the authority to make recommendations to our leadership in due course. As a result, it has been decided that our Deputy Chief Executive Officer, Aleksandr Filyurin, will take charge of this new commission, with the remaining members being appointed from both within and outside Rusneftegaz. As an organization, we feel that composing the panel in such a manner shall enable it to gain expertise from third parties, while also accounting for factors that are unique to our corporation. This is not limited to, but includes, our rapid economic development over the past decade, and the complexities of our multifaceted production activities. In response to this announcement, the head of the body overseeing this report delivered these remarks:
“Firstly, I would like to thank my fellow board members for appointing me to this important role. I have worked for Rusneftegaz for a long time now, longer than I have worked with any other company, and I have seen it transformed from a local oil producer to a global energy company. To be honest, it has been a remarkable change, and a lot of us had to hard to work very hard to make it happen. Now, it is time to look at where we are at, not only within this industry, but within the wider world. When these talks started taking place last summer, the rest of the board and I agreed that what was being proposed was sensible and could work. To be honest, the company we have built in our time here does not resemble the company that existed when we first started out on this project, and it is time to acknowledge that. If we want to take what we have done any further, we need to make changes. These are exciting times ahead for us, what we are planning to do can take Rusneftegaz to the next level, and I promise that I will work with diligence and speed to submit my report as soon as I can.”
Whilst this examination is set to be a significant undertaking for us, it should be noted that it has been almost a decade since our last major restructuring. In later times, Rusneftegaz has undergone a consequential transformation, with a plethora of new interests that have emerged in the years thereafter. It is also set to occur in the midst of our quarter-centenary celebrations, and is thus an apt moment to reflect upon our previous achievements, and contemplate how to advance our progression in both the near and distant future. This ultimately entails deliberating fundamental issues, such as whether there should be greater separation between the incumbent board of directors and our executive leadership, and if independent directors should be appointed to the former. Similarly, it also involves scrutinizing the suitability of any corporate partners or individual that has the capacity to facilitate the plans we delineate, and how soon these could take effect. Any investigations surrounding our global affairs will be the responsibility of Igor Migunov, who currently serves as our Director of International Operations, and will join Filyurin on the panel completing this task. Following his appointment, Migunov gave this statement:
“I am very grateful that I have been given the opportunity to serve on this committee. My colleagues and I will work hard to make sure that this project is successful. Since I joined Rusneftegaz in 2019, I have worked on many projects with many unique challenges. I am optimistic that with this project we will be able to create solutions for the long-term benefit of Rusneftegaz and its people.”
Perhaps one of the most pertinent matters this analysis intends to resolve is if Rusneftegaz can be listed on a stock exchange in the near term, and how this can be instigated, accounting for any alterations that may be necessary to commence this process. Although at present we are currently the largest private oil production company in the Russian Federation, our leadership believes it is crucial to examine if listing as a public corporation would facilitate the further expansion of our activities. Growth deriving from a flotation of our shares would originate from an enhanced ability to access finance from alternative commercial sources, which could then be invested accordingly to fund and expedite our enlargement. Similarly, it would also significantly increase our regulatory requirements for both financial reporting and other disclosures, which may embellish our reputation amongst our contemporaries, and thus make us a more credible partner to conduct business with. Whilst this review is unlikely to have the scope or the effect of a similar internal report published in 2005 that resulted in the reformation of the Group and the consolidation of our operations, it is still anticipated to have a consequential impact on this enterprise.
This is partially due to the fact that it is likely to precede a later, more extensive, inquiry into our current corporate activities. Both our ownership and our board of directors wholeheartedly believe that such an analysis is critical, with both our investment and research strategies due to be outlined across the next two years, with each requiring comprehensive preparation beforehand. Due to the sensitive nature of discussions that will be held in the weeks and months ahead, we will not be providing any further updates until this process has concluded, nor will we be publishing the final report once it has been approved by our executive leadership. However, any changes that arise in response to this study will be disclosed in due course, with subsequent briefings expected to be published by the end of the second quarter of this year. Likewise, any additional information regarding this subject shall be circulated solely to our staff, affiliates, subsidiaries and partners, and we will not be accepting questions from external parties with regard to these affairs at this present time. We necessitate your cooperation and understanding with this vital matter.
