Favorov Leaves as Naftogaz Restructures
Naftogaz Ukrainy’s head of integrated gas Andriy Favorov is leaving the company as part of the restructuring process, the state company said April 1.
He is also no longer the temporary head of the production business Ukrgazvydobuvannya, that job now going to Alexandr Romanyuk, the company’s deputy general director.
Gas production and sales were part of one division while the company had a public service obligation (PSO) for households and other consumers, but from May 1 the retail gas market will be liberalised, meaning the end to the PSO. Ukraine's domestic gas production was cheaper than imported gas and it was prioritised for the public sector.
The integrated gas business will be split into two divisions: production and commercial affairs. These two teams are now being set up.
Under Favorov’s leadership, the division improved the gas production programme, tightened up the economics of the investment programmes and continued diversifying its gas imports from Europe, enabling the country to begin the 2019-20 heating season with more gas at its disposal than any time in the last decade. This strengthened Ukraine’s hand in its negotiations with Russia over transit, Naftogaz said.
His team also made good progress exploring for new gas provinces, including the ultra-deep horizons under the Black Sea shelf, Naftogaz said.
Favorov’s market-oriented approach played an important role in transforming Naftogaz, bringing it new reliable trading partners in Europe, helping it develop a complete retail business, and laying the foundations for better upstream business which will be key for the company in the coming years, said CEO Andriy Kobolev.
Favorov said that gas production had been maintained, operating costs brought down and safety prioritised during his year and a half in office. In January, Naftogaz appointed Otto Waterlander, who has held senior positions at Anglo-Dutch Shell and business consultancy McKinsey, to restructure the company.