Officials representing ELPE (Hellenic Petroleum) and NIOC, the state-run National Iranian Oil Company, are set to endorse a recent agreement reached between the two sides at a ceremony in Tehran today, marking the resumption of bilateral trade following the lifting, just weeks ago, of western-imposed sanctions on Iran.
A 70-member Greek delegation headed by Prime Minister Alexis Tsipras and energy minister Panos Skourletis, has arrived in Tehran to discuss prospective additional business deals over the coming days, including in energy.
Besides ELPE managing director Grigoris Stergioulis, the Greek delegation includes Theodoros Kitsakos, chief executive at DEPA, the Public Gas Corporation, and Panagiotis Kanellopoulos, chief executive of M&M Gas, a wholesale trading venture involving the Mytilineos Group and Motor Oil Hellas.
Unlike the ELPE boss, the DEPA and M&M Gas officials have not traveled to Iran to sign deals but to explore future possibilities. Iran boasts the world’s second largest quantity of natural gas desposits, following Russia.
Based on infrastructure plans, it is anticipated that Greece will be able to supply Turkey and fellow European countries between 10 billion and 20 billion cubic meters of natural gas annually by 2020.
For the time being, the ELPE-NIOC agreement is at the forefront of Greek-Iranian energy developments. Many of the deal’s details have already been disclosed in recent reports.
ELPE expects to cover between 20 to 30 percent of its daily crude needs through Iranian supply. The exact proportion remains to be announced.
The Greek refinery’s repayment of outstanding debt owed to NIOC as a result of banking restrictions prompted by the sanctions on Iran in 2011, estimated at 600 million euros, will be settled over a four-year period to expire in 2019.
Also, the Greek company will cover 50 percent of its debt owed to NIOC through the supply of an equivalent amount of finalized products. It is not yet clear whether these products will be sold directly by ELPE to NIOC or through traders.
In addition, a further 10 percent of the debt amount will be covered through engineering services to be offered to Iran by Asprofos, an ELPE subsidiary firm. The work may include refinery unit revamps.
Various other details, including the credit period’s duration, are expected to be settled at a meeting today between the ELPE and NIOC chiefs.
It remains to be seen whether Iranian officials will reiterate their interest to acquire an equity share of ELPE. Just weeks ago, Iran’s deputy oil minister Amir Hossein Zamaninia, speaking on Iranian state radio, noted Iran is keen to acquire an equity share of ELPE. At the time, ELPE sources responded by claiming that the issue had not been raised during talks with Zamaninia in Athens. Skourletis, Greece’s energy minister, backed these ELPE claims.
The Greek state holds a 35 percent stake in ELPE. It has been transferred to TAIPED, the State Privatization Fund. The Latsis group, which owns a 42.6 percent equity share of ELPE through Paneuropean Oil, has officially rejected any chance of selling its interests in ELPE.