Naftogaz board insists on Kobolev remaining as CEO

The supervisory board of Ukraine’s state natural gas
enterprise Naftogaz submitted a letter to Prime Minister Volodymyr Groysman
expressing unanimous support for extending its employment contract with CEO
Andriy Kobolev, local media reported on March 13. At the same time, the board
recommends cutting his salary by 50% and abstaining from paying monthly and
quarterly bonuses. The board insisted on the “upmost importance” of ensuring
the continuity of the company’s management, “especially during the next 12
months”. Among Kobolev’s main tasks set by the board include completing the
unbundling of the gas transit system by the year end and boosting gas
production this year.

Recall, earlier the board recommended signing a new
three-year contract with Kobolev and slightly increasing his salary. Instead, the
Cabinet (which has the power to appoint and replace the Naftogaz CEO) ruled on March 6 to announce a competition
for the company’s CEO position as of March 26. In his comments the same day,
Groysman  minimized Kobolev’s achievements as Naftogaz CEO.

Alexander Paraschiy: Groysman has criticized Kobolev several times for his exceedingly high
salary, and the Naftogaz board seems to address this issue in its letter.
However, it’s hard to say whether such arguments will be enough for the prime
minister to change his intention to seek Kobolev’s replacement. Kobolev
remaining the CEO is likely the best option for the company’s stability. While
we expect Groysman will try to consider other alternatives, we believe that he
will ultimately find common ground with Kobolev and the company’s board.