Kremlin man takes over at gas giant

The move is a crucial part of the government's efforts to clean up the country's largest company.

Gazprom is the world's biggest gas producer and source of more than a quarter of Europe's supplies, accounting for 8% of Russia's gross domestic product.

But it is also widely seen as a lumbering, state-owned utility plagued with corruption.

Putin's man

The removal of Rem Vyakhirev as chairman had been largely expected.

He had been at Gazprom since its inception in 1989 and had had good relations with president Boris Yeltsin.

But after Vladimir Putin became president things became rockier for Mr Vyakhirev.

A year ago he was sacked as chief executive officer amid allegations of asset-stripping.

He was replaced by Alexei Miller, an ally of President Vladimir Putin, and given the less-influential post of chairman.

The board has replaced Mr Vyakhirev with Dmitry Medvedev, deputy head of president Putin's administration and himself a former Gazprom chairman.

Investors wary

Almost everyone agrees Gazprom is seriously undervalued.

Its share price values its vast reserves at just fifteen US cents a barrel - 100 times cheaper than some of its western rivals.

The battle of the boardroom is all about making Gazprom into a more conventional company with a consequential rise in its share price

The government owns 38% of Gazprom shares, but the company's reluctance to answer questions about its finances has scared away other investors.

Kremlin seats

Two representatives of outside interests were reappointed to the company's board.

Burkhard Bergmann, chief executive of Germany's Ruhrgas, and Boris Fyodorov of the United Financial Group brokerage, held off a challenge from US shareholder rights activist Bill Browder.

The government retained six of the 11 seats on Gazprom's board.

Meanwhile, Gazprom said it was expecting export revenues of $12bn (£7.9bn) in 2002.

This year's exports will include Gazprom's first sales in Britain, western Europe's largest gas market, totalling about 1 billion cubic meters (35 billion cubic feet).