GdF reorganizes to face deregulation

In a move intended to prepare Gaz de France (GdF) for deregulation of the European Union gas market�scheduled for Aug. 10�Chairman and CEO Pierre Gadonneix has organized the state-owned monopoly utility into five business units, each with a relative degree of autonomy.


PARIS�In a move intended to prepare Gaz de France (GdF) for deregulation of the European Union gas market�scheduled for Aug. 10�Chairman and CEO Pierre Gadonneix has organized the state-owned monopoly utility into five business units, each with a relative degree of autonomy.

"This is in line with the group's strategy to integrate the whole gas chain, from production to energy services," said GdF.

The traditional units of services, distribution, infrastructure, marketing, and exploration-production are being made free-standing entities, reflecting their importance in shaping the group's future development. Previously, E&P was part of the research division, and research manager Michel Bayle is now in charge of the unit.

The shift confirms GdF's determination to become a major gas producer. Its 2005 target is to produce 15% of the gas it markets.

As the world's largest gas buyer, marketing is a key division. It will be handled by the commercial manager Jean-Louis Mathias, assisted by Jean Abiteboul, who was in charge of gas supplies previously.

Although France's Parliament will be far from ready in mid-August to transpose the EU gas directive into French law, Gadonneix is determined to open up 20% of GdF 's French market to competion on the appointed date. This will involve 150 clients with a gas consumption in excess of 25 million cu m/year and will put an end to GdF's gas import monopoly.

Observers believe, however, that this will not suffice to bolster the group's position in a new competitive market. This will require alliances or other shareholders besides the state. Much has been said about this, even within the government. But the left-wing alliance now in power is wary of the powerful communist trade union CGT, which refuses to sanction what it sees as "denationalization" of the utility.

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