16/05/2018

Press release (Gazprom): Board of Directors reviews financial discipline in North Caucasus Federal District

The Gazprom Board of Directors took note of the information about the strengthening of financial discipline and the Company’s efforts aimed at addressing gas debt repayment by consumers in the North Caucasus Federal District (NCFD).

It was noted that the Company fulfilled all of its obligations for reliable gas supplies and gas grid expansion across the region. However, the growth in overdue debt for consumer supplies remains a key issue for NCFD.

In 2017, in order to streamline and enhance the transparency of consumer payments in Cherkessk, Makhachkala, Nalchik, Nazran and Vladikavkaz, Gazprom Mezhregiongaz Pyatigorsk was replaced with new regional entities focused on gas marketing. In December 2017, the receivables of Gazprom Mezhregiongaz Pyatigorsk were assigned to the new companies. As a result, the outstanding debt as of January 1, 2018, amounted to RUB 26.9 billion (RUB 45.6 billion less than on January 1, 2017; without taking into account the assignment, the overdue debt totaled RUB 85 billion in 2017). Over the first quarter of 2018, that figure grew from RUB 26.9 billion to 35.6 billion.

Gazprom makes systemic efforts to improve financial discipline across the region. In collaboration with law enforcement agencies, the Company collected RUB 0.32 billion from industrial consumers in the first quarter of 2018. The number of legal claims against individuals was raised significantly to 27,200 (up by 26 per cent from the first quarter of 2017). Targeted measures against non-payers were stepped up as well, with a 2.5-fold increase in the number of cut-offs. Consumers are encouraged to sign up for an online payment service, Consumer’s Personal Account, with the number of users growing by 19 per cent to 126,400 in the first three months of 2018.

As a result, the first quarter of 2018 saw an improvement in the financial discipline of four out of seven NCFD regions, namely the Stavropol Territory and the Republics of Ingushetia, Karachay-Cherkessia and North Ossetia-Alania.

The Company continues to work toward reducing gas losses throughout NCFD by, inter alia, detecting and preventing unauthorized gas offtake, interference with measurement devices and the use of uncertified gas equipment. Gazprom closely cooperates with federal executive and legislative authorities to improve the national legislation governing the relations between gas suppliers and consumers. The Gazprom Board of Directors Commission on Strengthening Financial Discipline for Domestic Gas Supplies regularly holds meetings in NCFD regions.

The Board of Directors instructed the Management Committee to carry on with strengthening financial discipline and addressing gas debt repayment by NCFD consumers.

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