Gazprom to Launch Major PR Campaign :: Charter'97 :: News

Since a series of “gas wars” with CIS countries undermined Western consumers` confidence in Gazprom, the Russian monopoly has been concerned with improving its image abroad. Kommersant has learned that OOO Gazprom Export is negotiating with a consortium of PR firms headed by the PBN Company on a three-year contract for a series of campaigns in the United States and European Union. Gazprom is prepared to pay $11 million in 2007 for those services. According to information obtained by Kommersant, the Gazprom campaign will be part of a larger campaign by Russian authorities to improve their image in the West.

A source close to the negotiations told Kommersant about the upcoming PR campaigns. Deputy head of the Gazprom information policy department Sergey Kupriyanov confirmed that negotiations were underway with a consortium headed by PBN. PBN has also unofficially confirmed the negotiations, but declined to comment officially. Deputy press secretary of the president of Russia Dmitry Peskov also confirmed that negotiations were going on.

According to Kommersant`s information, the contract will be made in the name of Gazprom Export (a wholly-owned subsidiary of Gazprom). Gazprom Export head Alexander Medvedev personally led negotiations on a three-year contract with Peter Necarsulmer, PBN chairman and CEO, who represented a consortium made up of his company, Hill & Knowlton and the Washington-based analytic firm Schoen & Berland Associates. The total value of the deal is not known, but Gazprom will spend $11 million this year to improve its corporate image.

The main task of PBN and its colleagues in the U.S. and UK will be to develop a program to improve Gazprom`s image abroad, mainly in the U.S. and EU. A source says that Gazprom Export wants to concentrate on its positioning as a commercial structure. “In the West, Gazprom is closely associated with the name of Russian President Vladimir Putin and his political circle,” the source explained. “The company wants to position itself differently.”

Gazprom needs a PR campaign now more than ever before. The oil and gas conflict with Belarus has damaged the reputation of Gazprom more than Transneft. Russia`s problems as a dependable energy supplier affect gas market, which is not very competitive, and not the competitive oil market. German Chancellor Angela Merkel spoke last week about a “loss of confidence” in Gazprom.

The 2007 budget of the PR consortium is comparable to the sum spent to the informational-promotional campaign that accompanied the G8 summit in St. Petersburg last year. According to unofficial data, a group of companies headed by Ketchum was paid at least $15 million for that. Dmitry Sokur, general director of Sokur and Partners, Ketchum`s partner in Russia, commented that $11 million is not a large sum for a PR campaign on the Western market. “The volume of one-time outlays to establish an image program is huge, especially if the company requires a correction of its image. It includes meetings with managers and executives, who frequently need explanatory material to counterbalance what is in the Western media.”

Svyatoslav Bychkov, managing partner of the SPN Ogilvy PR company, considers $11 million an adequate sum for Gazprom. “Most likely, $11 million is a prepayment and the total expenses will be greater, since Gazprom will probably pay on invoices, for advertising modules, for instance,” he suggested. The sum is about 8 percent of Gazprom`s 2007 PR budget, which was $140 million in 2006.

Kommersant has learned that the Gazprom campaign may be just part of larger campaign by the Kremlin to improve its image in the West. A list of contractors for a PR campaign is being discussed in the presidential administration now. Kommersant has learned that the Patton Boggs and Hogan & Hartson legal firms and Weber Shandwick, Burson Marsteller, Barbour Griffith & Rogers, Ruder Finn and Hill & Knowlton PR firms are under consideration. The final choice will be made in the next few months.