The fate of a long-running and unfinalized tender won by Azeri energy company Socar for a 66 percent stake of DESFA, Greece’s natural gas grid operator, will be cleared up in three weeks, when the sale procedure’s current letter of guarantee provided by the Azeri company expires. If not renewed by the end of August, a new procedure will need to be established and launched from scratch.
According to energypress reports, Socar, in more recent times, has not made any contact, or taken any initiatives, to finalize the deal.
The ratification of an amendment submitted to Greek Parliament by energy minister Panos Skourletis in mid-July, which drastically subdues the operator’s leeway for network usage hikes, was badly received by the Azeri company.
Prior to this, the deal had already been delayed by European Commission intervention, last year, ordering SOCAR to surrender a 17 percent share of DESFA’s 66 percent stake it had agreed to purchase after winning an international tender in 2013. This would limit Socar’s stake to 49 percent. Italy’s Snam has widely been considered a definite candidate for the surrendered 17 percent.
The government’s network usage hike-limiting amendment – a particularly favorable development for local industry, which was more susceptible to increases, and also positive, to a lesser degree, for households – reduces DESFA’s market value by 50 percent, Socar officials have claimed.
The lack of any recent contact between Greek and Azeri officials for the DESFA sale strongly suggests the current tender is headed towards a dead end. If the Azeri side does not conjure up a last-minute surprise move, then the focus will be on the next moves to be made by Skourletis, the energy minister.
Asked about the prospect of the DESFA sale sinking at a recent news conference, the minister noted that “nothing is bad, all is good,” a comment implying that he has already examined future alternatives.
The ruling Syriza-led coalition inherited the DESFA sale and its terms from the country’s previous administration. For Skourletis, the procedure’s eventual debacle, to be followed by a new and revised effort, is probably a prefered option. The government believes the current tender’s terms are tipped in favor of the buyer.
Skourletis would like to base the DESFA sale on the model used for IPTO, the power grid operator, which, if carried out successfully, will leave the Greek State with a 51 percent stake. A tender offering 24 percent of IPTO to a strategic investor is now in progress. The remaining 25 percent will be offered to investors through the bourse.
If a repeat of the IPTO model is not accepted by the country’s lenders for DESFA, then the government may seek to launch a new tender offering 66 percent of the gas operator with more favorable terms for the Greek State.