Gazprom CEO Miller Gets Another Five-Year Term

Alexey Miller has been re-elected for another five-year term as Gazprom's CEO, starting May 31, the Russian gas supplier reported on February 25.

Miller has served as Gazprom chairman since 2001 and was last re-appointed in 2016. He has headed the company for longer than any of the other current heads of Russia's major state-owned firms. Miller has also been the deputy chairman of the company's board of directors since 2002. 

Miller has led the gas exporter as it has steadily reformed its gas sales business in Europe over the years, moving away from long-term oil-indexed contracts to more flexible, shorter-term agreements and spot sales. During his tenure, the company has had numerous disputes with Ukraine and other buyers, and has endured an EU anti-trust investigation that ended with a settlement in 2018.

In recent years, Miller has presided over the completion of several major pipeline projects, including the Power of Siberia in December 2019 that opened up the Chinese market to Russian gas pipeline sales, and the TurkStream to Turkey in January last year, which has helped Gazprom consolidate its position in the southeast European market. He has also overseen the troubled Nord Stream 2 pipeline project to Germany, which is now nearing completion, over a year behind schedule.

Speculation has been circulating for several years that Miller might leave Gazprom, as part of a broader shake-up of the company to improve its efficiency. Gazprom has a reputation for high levels of capital spending, and its share price has generally stagnated, with the exception of a sudden spike in April 2019 when the company pledged to increase its dividends. Private rival Novatek, meanwhile, has seen steady and substantial growth in its stock value over the past five years.

Russian business daily Kommersant reported at the end of last year that Miller's contract would not be extended beyond May, citing sources. Nord Stream 2's completion would be treated as the final milestone in his career, the newspaper said.

"I see it as neutral and expected. There had been no indication from the company or government that there would be a change," Moscow-based Sova Capital analyst Mitch Jennings tells NGW. "This should help quell some of the volatility in the shares that could have been seen in the lead up to the end of May deadline had he not been re-appointed now."

According to Jennings, Gazprom's goal this year is to finally approve a new management incentive programme, in an effort to improve corporate governance. The company had hoped to take this step in 2020 but the coronavirus pandemic disrupted the process.