As an end-of-September deadline approaches for a letter of guarantee provided by Azeri energy Socar in its effort to acquire a majority stake of DESFA, Greece’s natural gas operator, the sale procedure seems doomed to sink, judging by the positions maintained by both sides.
Until now, the Greek government has not appeared prepared to discuss any further changes to a recent revision that repelled the potential Azeri buyer by severely limiting the operator’s network usage fee hikes, and, therefore, revenue potential. At the other end, Socar is indirectly informing that it will not take any initiatives for a solution.
The Azeri company has indicated it will come forward for an agreement on the DESFA deal only if offered compensation for revenues lost as a result of the revision. A reduction in the sale price, established through an international tender completed in 2013, is not possible as such a change would terminate the current tender. As an alternative, Socar officials, in the past, proposed indirect compensation in the form of the entire amount of DESFA’s deposits, estimated at 100 million euros. But this was rejected by Greek officials.
Socar acquired the right to purchase 66 percent of DESFA after emerging as the winning bidder of the 2013 tender. The slow-moving procedure was further delayed by more recent intervention from the European Commission, demanding that the Azeri firm surrender 17 percent of DESFA to a certified European operator. Italy’s Snam is believed to have reached an agreement with Socar for this 17 percent share.
However, the Greek government, especially energy minister Panos Skourletis, its head representative for the DEFSA sale, appears anything but willing to push for a solution at this late stage of the sale attempt. Instead, its permanent end and relaunch as a new and revised procedure based on a current tender seeking to sell part of IPTO, the power grid operator, appears likeliest.
The IPTO sale effort, shaped by Skourletis and his team, intends to transfer 51 percent of the power operator from power utility PPC, the parent company, to the Greek State, offer 24 percent to a strategic investor and the remaining 25 percent through the bourse.
US officials – keenly anticipating Socar’s entry into the Greek market, and, by extension, the wider southeast European market, as part of a plan to diversify natural gas supply in Europe – have expressed their disappointment over the DESFA sale’s stalemate situation. It remains to be seen whether this discontent is transformed into increased western pressure in the coming weeks for the DESFA deal’s finalization through the current tender.