"Direct costs are estimated at about $100 million," said Alexander Ananenkov, deputy board chairman of the natural gas monopoly.
According to Ananenkov, the company will give the exact figure after its board of directors approves specific reformation measures.
Gazprom's subsidiaries will also be reformed to make the natural gas monopoly continue to be a vertically integrated company, Ananenkov said.
Gazprom's main subsidiaries of gas production, transportation, processing and underground storage will continue under the company's sole ownership.
According to Ananenkov, the reform is supposed to raise their production and economic efficiency and make financial flows transparent by concentrating a particular type of activity in a particular company, for example, gas, oil and gas condensate production, pipeline transportation, underground storage or gas distribution.
Gazprom will retract all non-core activities and assets from its subsidiaries.
The reform will transform Gazprom's 23 subsidiaries, which currently combine various activities, into seven gas producing and 17 gas transportation companies charged with a particular function.
Gazprom will also establish some new subsidiaries to maintain and develop non-core activities. Technological communications will be assigned to Gazprom's Gazsvyaz, which will create regional affiliates on the basis of units transferred to it.
Ananenkov also said that the transformations are expected to reduce personnel by an estimated 55,000-65,000 in gas transportation and 29,000-39,000 in gas producing companies. As a result, the personnel of gas production and transportation companies will be reduced by about 103,000 during a three-year period.
However, the reform does not mean personnel cuts. It aims to create new legal entities and a market environment to provide services to Gazprom's core business companies, Ananenkov said.
The second stage of the reform will help Gazprom raise its capitalization from 10% to 20% and its credit rating by a further grade.
