A Eurogroup meeting of EU finance ministers scheduled for December 5, just days after the latest one-month deadline extension for the DESFA (natural gas grid operator) sale, now reset for November 30, is expected to apply pressure on the Greek government to reach a final agreement with the operator’s prospective buyers.
The government wants to have completed the bailout’s ongoing second review before the December 5 meeting in order to immediately follow up with debt reduction talks.
Completion of the DESFA sale prior to this December date will lend some support to the government’s debt-reduction case. The DESFA sale is a pending issue that spilled over from the bailout’s first review.
It remains unclear whether the Azerbaijani energy firm Socar, the winning bidder of an international tender for a 66 percent share of DESFA, had the Eurogroup meeting’s timing and impact on negotiations in mind when it decided yesterday to extend, yet again, its letter of guarantee by an additional month.
Socar must surrender at least 17 percent to a certified European operator as a result of European Commission intervention. Italy’s Snam has moved in to take on a surrendered amount.
The Greek government would be taking a big risk should it send finance minister Euclid Tsakalotos to next month’s Eurogroup meeting without good news on the DESFA sale. Brussels and the US, both looking to diversify natural gas supply in Europe to lessen Russia’s dominance, are pushing for a deal.
DESFA’s negotiating sides remain at odds over the operator’s sale price. Socar, the winner of a tender in 2013 on the strength of a 400-million euro offer for a 66 percent stake of DESFA, and Snam, its partner in this venture, both believe the operator is worth far less as a result of revenue-restricting measures imposed last July by Greek energy minister Panos Skourletis. The buyers believe a price tag of 300 million euros is more appropriate, considering the DESFA revisions. Despite the gap, Socar and Snam officials believe a solution is possible.
A change to the original price agreed to through the international tender is not possible as this would cancel the procedure, the government insists. Intervention by RAE, the Regulatory Authority for Energy, or an amendment to the Skourletis bill will be needed if a final agreement is to be reached. An increased dividend yield could also be considered.
Whatever the case, officials at Socar, which has hung on to the long-running DESFA sale attempt for years, remain cautiously optimistic.