Socar has described as “positive” and “sincere” a crucial meeting held in Athens Tueday between Greek Prime Minister Alexis Tsipras and the Azerbaijani energy company’s president Rovnag Abdullayev as part of the effort to find a solution for the troubled sale of DESFA, Greece’s natural gas grid operor, according to a Socar announcement released yesterday.
The sale was kept alive following Socar’s last-minute decision to extend an expiring letter of guarantee by a month, which now gives officials until October 31 to reach an agreement. The previous letter of guarantee’s deadline had been set for September 30, three days after this week’s crucial meeting.
During the meeting, which lasted one-and-a-half hours, the Greek Prime Minister described Azerbaijan as a strategic partner for Greece and Socar as a strategic investor, the Socar announcement noted.
Tsipras also said all efforts would be made to facilitate Socar’s Greek market entry, according to the company statement, which also informed of the details of the working group established to seek common ground for a solution.
Azerbaijani press reports reflected Socar’s positive comments. However, comments made by the country’s ambassador to Greece, Rahman Mustafayev, who attended the meeting, suggest that the session was anything but smooth. He also indicated that the formation of a working group was proposed by Socar, adding that it will closely with Snam, also a potential buyer of a stake in DESFA.
Socar emerged as the winning bidder of a 2013 international tender offering a 66 percent stake of DESFA. The European Commision eventually intervened, requiring the Azerbaijani company to surrender at least 17 percent stake of DESFA to a certified European operator. Snam and Socar are believed to have reached an agreement for the surrendered stake, if the deal is finalized. Most recently, Socar was angered by a revenue-limiting measure engineered and implemented by Greek energy minister Panos Skourletis. This development prompted an extended communication breakdown. The Azerbaijani company has since contended that the market value of DESFA’s 66 percent is now worth well under the 400 million euros it had originally offered.
Citing the unfavorable developments that have ensued since 2013’s tender, an AzerNews media report noted Socar will seek an agreement only if the DESFA sale price is significantly reduced. This news source also reported Snam remains interested in acquiring DESFA’s 17 percent.
The overall impressions following Tuesday’s meeting indicate that the road towards a deal will be far more challenging than what Athens, cautiously optimistic, has described. Azerbaijani officials appear determined to have the upper hand in the negotiations.