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Gazprom Neft Moving to Saint Petersburg

Alexander DybalInterview with Alexander Dybal, Deputy Chief Executive Officer for Corporate Communications, Gazprom Neft

Internet newspaper

The head office of St Petersburg’s biggest taxpayer, Gazprom Neft, is scheduled to open for business in the Northern Capital in early December. Hundreds of employees are set to move from Moscow with nearly a hundred jobs to be created for specialists from St Petersburg and the surrounding regions. Alexander Dybal, a member of the Management Board at Gazprom Neft, told how the city will benefit from the biggest move in the history of modern Russian business, where Gazprom Neft will be housed, and who refused to leave Moscow.

— Why was the decision taken to relocate the company to St Petersburg without waiting for the construction of the Lakhta Centre to be completed?

— The decision to move the corporate centre to St Petersburg was taken by the company’s shareholders in 2006. That was when Gazprom Neft was actually registered in St Petersburg and began to develop plans to relocate the head officeinto the specially builtGazprom Social Business Centre. In the end,the decision was taken to build the Lakhta Centre outside the urban area on the Gulf of Finland. For obvious reasons, the beginning of construction of the complex was pushed back, however the schedule for moving the corporate centre to St Petersburg has not changed.

As of the beginning of December 2011, the head office of Gazprom Neft will be fully operational in the Northern Capital. However, it is important to note that several of our subsidiaries, which run the Gazprom Neft North-Western retail network, carry out bunkering in the seaport and refuel aircraft at Pulkovo airport, have already been operating out ofSt Petersburg for several years.

— How many people did Gazprom Neft employ in Moscow?

— About a thousand.

— How many of them will be moving to St Petersburg or remain at the Moscow office? Will you see new faces from St Petersburg and has the recruitment process been completed yet?

— An overwhelming majority of head office employees are moving to St Petersburg. There are about a hundred jobs which have yet to be filled and which will be occupied by specialists from St Petersburg as well as employees of our subsidiaries located in other regions. During the transfer our efforts have been aimed primarily at ensuring the smooth operation and the continuity of existing business processes. This is only made possible by retaining a highly professional team of employees, primarily in profiled professions: specialists in exploration and production, refining and logistics. Therefore, the majority of available positions are in the middle management and rank-and-file sectors.

I would especially like to emphasise that anyone who is interested in working for the company should contact us either by telephone or at the addresses specified in the relevant section of the company website.

— How difficult was it to find specialists in St Petersburg, and what positions were hardest to fill?

— St Petersburg is known for its high levels of education, so there has been no problem finding highly qualified professionals in law, finance, capital construction, general administration and management, marketing and service. However, our key areas of activity are exploration, production and refining, and we have experienced some difficulties finding qualified staff here as they are not as abundantin the St Petersburg labour market. Therefore our search for employees is not limited to St Petersburg, but covers the main regions of the company’s presence and will be carried out largely through internal staff rotation.

Gazprom Neft Group encompasses over 70 companies in Russia and abroad, with projects being carried out in Serbia, Iraq, Angola, Venezuela, Italy, Kyrgyzstan, Turkmenistan, Kazakhstan and Belarus. The company operates a multi-level training and development programme, which provides our employees with opportunities for professional growth and career development, which is our first priority when filling vacancies.

— How did you personally resolve problems in filling vacancies in your subordinate divisions?

— The specific dates for the relocation of the Gazprom Neft head office to St Petersburg were identified over a year ago, and I have had plenty of time to hold discussions with the heads of my unit’s subdivisions regarding their plans. Several managers reported that, due to family circumstances and commitments, they would be unable to move. As a result, I have taken on two executives from Western Siberia and two from St Petersburg, and in the summer several local specialists took up positions in various departments of the communications department.

— How keen were the Muscovites to move? What were the main reasons for refusal?

— It is important to remember that Gazprom Neft is an international company, and therefore the location of the head office is less important than it would be for regional companies. The overall geography of activity and its global diversification are much more important. For Russia, the relocation of a large company from Moscow is an event. In the United States three hundred thousand corporate relocations take place every year. Nowadays more and more major international companies have their headquarters located away from capital cities. This is both useful for the companies involved and beneficial from a regional economic developmentpoint of view. Statistics show that every new job at a big company creates five positions at smaller companies which service that business. So it will be in St Petersburg, where local companies will have the opportunity to participate in Gazprom Neft tenders.

Having developed the company to a new, international level, we find ourselves in line with these trends, and those who want to grow with the company and make a career should be prepared to move, possibly more than once. Right now we have employees who travel for work to Eastern Europe, Africa, Central Asia and the Middle East. The relocation of our headquarters happened within the country and we are moving to the most beautiful city in Russia, which boasts good infrastructure and provides many opportunities for personal and professional development. Loyalty to the company plays an important role in many of our staff’s decision making process: the chance to develop professionally at Gazprom Neft holds a great deal of meaning.

It is important that we began preparations for relocation well in advance. From the very first day we were in open dialogue with our employees. Everybody had the time and opportunity to make an informed decision. We believe that on the whole this process heralded positive results: the majority of rejections were related to family circumstances, the difficulty of moving family members and the percentage of employees who rejected the move is very small. Out of all of the company’s senior management, only one member of the Management Board and four heads of departments couldn’t move for family reasons.

— Have all those who are moving already acquired accommodation, and was it at their own expense, or that of the company? Which is the better option for Gazprom Neft: purchase or rental of employee housing? What are the requirements for housing, how easy is it to find the desired accommodation in St Petersburg, is it available at reasonable prices? Estate agents are already talking about the growth in demand and prices for accommodation for sale and let which has primarily been driven by Gazprom Neft’srelocation. Numerous agencies around the city posted announcements regarding the purchase or rental of flats on behalf of the company...

— I would like to dispel immediately the myths surrounding this: the company has not bought, and will not buy, any housing for any members of staff. We will provide key employees with some compensation to cover rent for the initial months of their lives in St Petersburg.All decisions regarding rental and purchase of housing are taken by the employees themselves. As far as we know, up until now only a few dozen apartments have been purchased by our employees, mainly in new, high-quality buildings in the Primorsky district near to the site of the Lakhta Centre. I do not think that the rental of several hundred, and the purchase of several dozen flats will have a significant impact on the property market in a city which already has five million residents. Moreover, a number of the employees who are arriving from Moscow are former St Petersburg residents who moved to Moscow for work at the start of the 21st Century, but retained housing in St Petersburg. So, looking at objective data, it becomes clear that estate agents are just trying to “warm up” the market when they talk about mass buying on the part of Gazprom Neft.

Once again, the decision as to whether to rent or buy a flat is taken by the employees themselves. No agency is authorised to work on our behalf by renting or buying accommodation. Therefore, any announcement on this is unscrupulous behaviour on the part of the estate agencies involved.

— What kind of office space and how many square metres have been leased in St Petersburg for the Gazprom Neft? How difficult is the office situation in St Petersburg? Have you fully abandoned the use of the “Parade Quarter” for this purpose, and is your company purchasing any other offices?

— The building complex leased to accommodate the corporate centre of Gazprom Neft is located in the historic centre of St Petersburg, at Pochtamtskaya Street 3-5. The area is slightly over 10,000 square metres. The class of this office is much higher than the current one in Moscow, and the rental rates are approximately the same, so the company has already benefited. This is our temporary office, where we will reside until the completion of the Lakhta Centre.

Along with the many obvious advantages, the office does have one drawback, which is that it is too small for our company. Strangely enough, the location in the historical centre is also a downside, as it is already overloaded and the infrastructure is simply not ready to accommodate the offices of large companies like ours. However, there are no bigger offices of the required standard available in St Petersburg at this time. Therefore, some units and subsidiaries will continue to work in offices on Galernaya Street and Paradnaya Street. We have no plans to purchase any office space in St Petersburg, as once construction is finished we will finally gather with our subsidiaries and other companies of Gazprom Group under the roof of the Lakhta Centre. The Centre is near the new FC Zenit St Petersburg stadium, which is very good for when matches take place on weekdays. It is also important for me personally, as aside from my duties as a member of the Board of Gazprom Neft, I am also an advisor to the President of Zenit.

— Will it be harder or easier to run the company from St Petersburg, and will it be run out here or in Moscow?

— The company will be managed from the corporate centre, which as of December will be in St Petersburg. The only control function which, for obvious reasons, will remain in Moscow is communication with federal government agencies. Moreover, the company’s main activities in the production of oil are focused in the Yamal-Nenets and Khanty-Mansi Autonomous Districts, Omsk and Tomsk regions. Our refineries are located in Omsk, Moscow, Yaroslavl and Serbia. G-ENERGY engine oil is poured into cans at our factory in the Italian city of Bari. Our company’s retail network covers almost all the regions in the European part of Russia.

Out of 60,000 employees, only just over a thousand will work in St Petersburg. In this situation the transport capacity of the city is extremely important to us, particularly flight routs to the cities of Siberia. We have already begun negotiations with airlines on the possibility of direct regular connections with Noyabrsk and Khanty-Mantiysk. We hope that passenger flow will be enough to entice the airlines. Flights to Omsk are already carried out by Transaero, and we are confident that with our arrival the rationale for those flights will substantially increase.

— Did the city administration help with the move, and in what way?

— For a long time we have enjoyed a constructive relationship with the administration of St Petersburg. The city actively encourages investment and the arrival of companies with the capacity to create new jobs and give further impetus to the city. In particular, our employees received support in dealing with social issues, such as help in the placement of children in schools. As for the whole company, the priority for us,as for other major investors, is a good investment and economic climate.

— What other companies of the Gazprom Group are moving to St Petersburg?

— Recently the management of Gazprom decided to relocate Gazprom Export to St Petersburg.

— How much tax revenue did St Petersburg receive from Gazprom Neft in 2010?

— Gazprom Neft has been St Petersburg’s largest taxpayer since 2007. In 2010, our taxes amounted to about 12 billion roubles, about 25% higher than 2009. So our contribution to the city canbe called significant, without any exaggeration,However, one should keep in mind that this data only refers to Gazprom Neft.There are quite a few companies within the Gazprom Group that pay taxes in St Petersburg, so the total contribution from Gazprom is even higher. This allows St Petersburg to implement social programmes and shape the budget for the conservation and restoration of the historic district.