ELPE close to acquiring 32% stake in Cyprus LPG facility

ELPE (Hellenic Petroleum) is close to acquiring a 32 percent stake in an LPG facility being developed in Cyprus’ Vasiliko area by the Petrolina group, the country’s biggest petroleum company, owned by the Lefkaritis family.

ELPE’s chief executive Andreas Siamisiis is expected to visit Cyprus today for talks on the deal. Both sides are awaiting the European Commission’s approval.

The unit, to be equipped with storage spaces totaling 5,000 square meters and bottling systems to meet the needs of all LPG trading companies on Cyprus, is expected to be ready to operate towards the end of the year.

The ELPE group, which has closely monitored energy-sector developments on Cyprus for quite some time now, has already invested over 150 million euros in the country.

Last year, ELPE made investments for a new petroleum product distribution facility in the Vasiliko area, network modernization, as well as acquisitions for greater trading activity with industrial consumers.

The Petrolina group, founded in 1961 as FINA (Cyprus), was acquired by the Lefkaritis group in 1983 and renamed Lina Ltd before it was named Petrolina (Holdings) Ltd in 1999.

The company now owns liquid-fuel storage and management facilities in Vasiliko, following an investment of more than 80 million euros that was completed several years ago.

In the retail market, Petrolina owns 100 petrol stations operating throughout Cyprus under two company names, Petrolina and Agip.

Petrolina has worked closely, for decades, with Italian giant ENI, an association that includes exclusive import and trading rights for ENI’s lubricants, greases and liquids in the Cypriot market.

Petrolina was listed on the Cypriot stock exchange in December, 2020. Late last year, the company entered the Greek market, acquiring fuel and liquid gas retailer Silk Oil following many months of negotiations.

Energy privatization plans delayed by negative conditions

The government has decided to slam the brakes on procedures for major energy-sector privatizations, preferring to defer bidding deadlines as a result of a series of administrative hurdles and external factors, exacerbated by challenges and uncertainties caused by the pandemic over the past year.

Binding-bid deadlines for the sales of two gas utility DEPA offshoots, DEPA Commercial and DEPA Infrastructure, initially planned for this month by privatization fund TAIPED, will now be reset for early autumn, sources have informed.

Lockdown measures have prevented possible buyers from visiting the DEPA Commercial and DEPA Infrastructure headquarters and facilities as part of their due diligence procedures.

In addition, an ongoing legal battle between DEPA Commercial and ELFE (Hellenic Fertilizers and Chemicals) has also unsettled potential buyers. According to sources, investors are demanding protection in the form of guarantees should any court verdict require DEPA Commercial to compensate ELFE over a gas-pricing dispute.

As for issues surrounding the DEPA Infrastructure sale, Italy’s Eni, currently holding a 49 percent stake in EDA THESS, a DEPA Infrastructure subsidiary distributing to the Thessaloniki and Thessaly areas, wants to sell its stake. Officials are now examining a solution that would enable the DEPA Infrastructure privatization to be completed and followed up by the sale of Eni’s 49 percent stake in EDA THESS.

TAIPED’s announcement of second-round qualifiers in a tender offering development and operation of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece is expected in April. But the overall procedure will not be completed until next year.

A privatization plan for ELPE (Hellenic Petroleum) has been put on hold given the unfavorable conditions surrounding the global oil industry at present.

DEPA Commercial, Infrastructure sales delayed, new June bids deadline seen

The privatization schedule for gas utility DEPA’s two offshoots, DEPA Commercial and DEPA Infrastructure, appears headed for further delay as a result of four main issues holding back procedures, sources closely monitoring these sales have informed.

The privatization fund TAIPED had initially planned to accept financial offers for DEPA Commercial and DEPA Infrastructure this month but has since unofficially extended these offer deadlines to April. Further revisions cannot be ruled out, the most likely outcome being a deferral of these deadlines to the end of June.

As for the DEPA Commercial sale, lockdown restrictions have made it difficult for potential buyers to visit the company facilities for on-the-spot technical and financial appraisals as well as clarification on vague points. This has delayed the accumulation of information needed by possible buyers for a complete picture on the gas company’s financial standing.

In addition, an ongoing legal battle between DEPA Commercial and ELFE (Hellenic Fertilizers and Chemicals) has also unsettled potential buyers. According to sources, investors are demanding protection in the form of guarantees should any court verdict require DEPA Commercial to compensate ELFE over a gas-pricing dispute.

Two issues are also obstructing the DEPA Infrastructure sale. Firstly, Italy’s Eni, currently holding a 49 percent stake in EDA THESS, a DEPA Infrastructure subsidiary distributing to the Thessaloniki and Thessaly areas, wants to sell its stake. As a result, two options are being examined. One entails DEPA Infrastructure buying Eni’s 49 percent stake in EDA THESS. The other involves incorporating EDA THESS into the DEPA Infrastructure sale.

The other concern holding back proceedings for the DEPA Infrastructure sale has to do with pending appraisals, by the possible buyers, of new distribution network development plans prepared by the gas company’s three distribution subsidiaries, which, besides EDA THESS, include EDA Attiki, covering Athens, and DEDA, covering the rest of Greece. Suitors may require as much as two months to complete their respective appraisals.

DEPA Infrastructure sale could include Eni’s 49% in EDA Thess

The likelihood of revisions to Greek privatization fund TAIPED’s ongoing sale of DEPA Infrastructure that would incorporate the sale of a 49 percent stake in gas distributor EDA THESS, held by Italy’s Eni gas e Luce, into the procedure is now seen as probable as talks on the prospect have advanced.

DEPA Infrastructure, EDA THESS’s parent company, holds a 51 percent stake in the gas distributor covering the Thessaloniki and Thessaly areas, while Eni gas e Luce maintains the management rights with its 49 percent stake in the gas distributor.

Though Eni gas e Luce has been particularly upbeat in its judgement of EDA THESS’s performance until now, its involvement in distribution has remained secondary to retail energy, the company’s primary focus, on an international scale.

Eni gas e Luce’s 49 percent stake in EDA THESS is the Italian company’s sole distribution investment.

Prior to TAIPED’s launch of the DEPA Infrastructure sale, Eni gas e Luce had made clear its intentions to withdraw from its Greek investment in gas distribution.

DEPA has decided not to exercise priority rights it holds for EDA THESS’s 49 percent stake.

Eni gas e Luce initially seemed to reach an agreement to transfer its EDA THESS stake to Italgas, Italy’s biggest gas distributor and Europe’s third largest. However, Greek officials objected, deeming such a move would have given Italgas an advantage over rivals in the sale of DEPA Infrastructure. Italgas is one of six bidding teams through to this privatization’s second round.

Following a period of stagnancy, Eni gas e Luce returned, late in 2020, with a fresh proposal to TAIPED, calling for the attachment of its 49 percent stake in EDA THESS to the DEPA Infrastructure sale.

Besides Italgas, the other five bidding formations that have qualified for the second round of the DEPA Infrastructure sale are: EP INVESTMENT ADVISORS; FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II); KKR (KKR Global Infrastructure Investors III L.P.); MACQUARIE (MEIF 6 DI HOLDINGS); SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd.

 

Gas developments in the East Med

The international oil companies (IOCs) are still reeling under the impact of low oil and gas prices and massive losses and asset write-offs during 2020. ExxonMobil, under increasing pressure, is considering further spending cuts and even a shake-up of its board.

The path to full recovery will be slow and at the end of it, in 2-3 years, the IOCs will be different, placing more emphasis on clean energy and renewables.

In the meanwhile, around the East Med, Egypt is forging ahead. It has signed a new exploration agreement with Shell for an offshore block in the Red Sea. This is in addition to the 22 agreements signed during 2020 that included major IOCs such as ExxonMobil, Chevron, Shell, BP, Eni and Total. Moreover, EGPC and EGAS are planning to offer onshore and offshore exploration blocks for bidding in February.

This continuing activity led to the discovery of 47 oil and 15 natural gas fields in 2020, 13% more than in 2019, despite Covid-19.

Tareq El-Molla, Egypt’s petroleum minister, signaled earlier this month Egypt’s intention to expand its petrochemicals sector to take advantage of the country’s expanding hydrocarbon resources. Egypt has updated its petrochemical national plan until 2023 to meet the increasing prospects in this industry.

LNG exports

Egypt has also benefited from the recent increase in LNG prices, resuming exports from its liquefaction plant at Idku, with most exports going to China, India and Turkey. The country is also ready to resume exports from its second liquefaction plant at Damietta starting end February. This has been lying idle since 2012 due to disputes that have now been resolved.

LNG exports will mainly utilize surplus gas from the Zohr gasfield and possibly imports from Israel, should prices allow it.

In fact, the resumption of LNG exports from Idku relieved some of the pressure on Egypt’s gas market, which is in oversupply partly due to impact of the pandemic, but also due to falling gas demand in Egypt’s power sector and growth in renewable energy.

El-Molla said that Egypt is planning a revival of its LNG exports. But this depends greatly on what happens to global markets and prices.

The International Energy Agency (IEA) said that the Asian LNG demand and price spike in January was a short-term phenomenon and it is not an indicator that global demand will rebound in 2021. The IEA expects only a small recovery in global gas demand this year, after the decline in 2020, partly due to the pandemic. But given ongoing concerns over the pandemic, the rate of gas demand growth will remain uncertain. The IEA said the longer-term future of LNG markets remains challenging.

Gas from Israel

Chevron – having acquired Noble Energy and its interests in the region last year – with Delek and their partners in Israel’s Leviathan and Tamar gasfields, signed an agreement to invest $235million in a new subsea pipeline, expanding existing facilities. According to an announcement by Delek, the pipeline will connect facilities at Israeli city Ashod to the EMG pipeline at Ashkelon, enabling Chevron and its partners to increase gas exports to Egypt to as much as 7billion cubic meters annually (bcm/yr).

The partners signed agreements last year to export as much as 85bcm/yr gas to Egypt over a 15 year period. Gas supplies from Israel to Egypt started in January last year.

It is not clear at this stage if new agreements will be reached to fully utilize the increased export capacity from Israel to Egypt, but given Egypt’s gas oversupply this may not be likely.

These developments, though, show the vulnerability of Cyprus and the weakness of relying on trilateral alliances with Egypt and Israel for its gas exports.

EastMed gas pipeline

This is being kept alive by regional politicians. Only this week, Greece, Cyprus, Israel, Bulgaria, Hungary and Serbia confirmed their support for the EastMed gas pipeline.

While such developments are good politically, bringing like-minded countries around the East Med closer together, they are not sufficient to advance the project. This requires private investment and buyers of the gas in Europe. None of these is forthcoming, because the project is not commercially viable. By the time the gas arrives in Europe it will be too expensive to compete with existing, much cheaper, supplies.

Europe is also moving away from gas and from new gas pipeline projects. Catharina Sikow Magny, Director DG Energy European Commission (EC), covered this at the European Gas Virtual conference on 28 January. Answering the question how much natural gas will the EU need in the future, she said ZERO. She was emphatic that with the EU committed to net zero emissions by 2050, by then there will be zero unabated gas consumed in Europe. In addition, with the EU having increased the emissions reduction target from 40% to 55% by 2030, the use of gas in Europe will be decreasing in order to meet the 2030 and 2050 climate targets. She said that ongoing natural gas projects are expected to be completed by 2022 – with no more needed after that.

With exports to global markets becoming increasingly difficult, there are other regional options to make use of the gas discovered so far around the East Med, including power generation in support of intermittent renewables and petrochemicals, as Egypt is doing. The newly constituted East Med Gas Forum (EMGF) should place these at the heart of its agenda.

What about Cyprus?

Hydrocarbon exploration activities around Cyprus are at a standstill, partly due to the continuing impact of Covid-19, but also due to the dire state of the IOCs and the challenges being faced by the natural gas industry in general.

This lack of activity in resuming offshore exploration may be a blessing, taking the heat off hydrocarbons, while priorities shift to discussions to resolve the Cyprus problem and the Greece-Turkey maritime disputes.

Dr Charles Ellinas, @CharlesEllinas

Senior Fellow

Global Energy Center

Atlantic Council

3 February, 2021

 

Rescue talks for Prinos, Greece’s only producing field, making progress

Talks between Energean Oil & Gas and officials at the energy and economy ministries for a solution to rescue offshore Prinos, Greece’s only producing field in the north, are making progress, sources have informed.

Heightened Turkish provocations in the Aegean Sea over the past few days – the neighboring country sent a survey vessel into Greece’s EEZ – and greater US presence in the wider southeast Mediterranean region, are two developments that have injected further urgency into the Prinos field rescue talks.

The east Mediterranean is at the core of geopolitical developments that promise to create new political and energy sector conditions.

US oil corporation Chevron, America’s second-biggest energy group, has joined fellow American upstream giant ExxonMobil in the east Mediterranean with a five billion-dollar acquisition of Noble Energy.

This takeover by the California-based buyer adds to the Chevron portfolio the gigantic Leviathan gas field in Israel’s EEZ, as well as the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet.

It also offers Chevron prospective roles in the East Med pipeline, to supply Europe via the Leviathan field, and Egypt’s LNG infrastructure, all elevating the petroleum group into a dominant regional player.

Israel and Cyprus recently ratified the East Med agreement, as has Greece, while Italy appears to be examining the prospect.

In another regional development, the Total-ENI-ELPE consortium is preparing to conduct seismic surveys at licenses south and southwest of Crete, and an environmental study southeast of Crete has been approved by Greek authorities. Also, oil majors with interests in Cyprus’ EEZ have planned a series of drilling operations for 2021.

Meanwhile, Turkey, trespassing into both Greek and Cypriot EEZ waters, consistently cites a memorandum recently signed with Libya as support for its actions, as well as its refusal to sign the UN’s International Law of the Sea treaty, strongly disagreeing with an article that gives EEZ and continental shelf rights to island areas.

Greek government officials are well aware that closure of the Prinos field amid such precarious conditions would lead to major consequences, not just economic and social, as would be the case under normal conditions, but also geopolitical.

Oil drilling plans on hold, forced by price collapse, pandemic

Preliminary hydrocarbon exploration work planned by oil companies at licenses in the Ionian Sea and south of Crete is being postponed for an indefinite period that could last as much as a year, possibly more.

Upstream players are revising plans as a result of the collapse in oil prices and the coronavirus pandemic, a double setback for the sector.

Worse still, investment conditions for the Ionian Sea and Crete areas are made even more challenging by the fact that neither has yet to reveal sustainable fields.

In addition, both Greek zones are deep-sea areas of depths ranging from 2,500 to 3,000 meters, making exploration a high-cost venture.

Global oil majors are reducing investments and expenses by the billions in response to the unfavorable market conditions that have emerged over the past couple of months.

Fields with proven reserves have not been spared, which pushes untested fields such as those in Greece even further down the priority list.

The resumption of drilling ventures still at preliminary stages is not likely until oil prices rebound, energy minister Costis Hatzidakis noted in an interview with Greek daily To Ethnos.

It is a similar picture for Cyprus. The Eni-Total consortium yesterday announced it is postponing oil drilling activities in Cyprus’ Exclusive Economic Zone until March or April next year.

PPC expects major LNG tender turnout for 2.7 million MWh

Gas suppliers are expected to turn up in numbers for a power utility PPC tender expiring today with offers to provide three LNG shipments needed by the utility between March and May. PPC plans to purchase a total of 2.66 million MWh through this tender.

Between nine and ten gas suppliers, including major Greek and foreign LNG players, will submit offers, PPC has been informed, according to energypress sources.

Besides leading Greek gas traders, the procedure is expected to attract companies such as Rosneft, Eni Trading, Gunvor, Glencore, Shell, Cheniere and Tellurian.

All participants were required to sign Master Sale Agreements, committing them to their offers without any revisions.

PPC wants a first LNG shipment of 900,000 MWh on March 24, a second delivery of 815,000 MWh on April 21 and a third of 950,000 MWh on May 20.

Today’s tender confirms a change of strategy by PPC, searching markets around the world, from Asia to Qatar and the USA to Russia, for low-priced LNG.

The continual drop in LNG prices promises major cost savings for a company the size of PPC, requiring 1.35 bcm per year.

 

Athens wants greater French hydrocarbon engagement

The government wants France’s Total to play a more active role in Greek offshore hydrocarbon exploration, Prime Minister Kyriakos Mitsotakis made clear during a meeting in Paris yesterday with the French group’s chief executive Patrick Pouyanné.

The potential of Greece’s hydrocarbon market, including offshore licenses south and southwest of Crete held by a Total-led consortium – it also features Exxon Mobil and Hellenic Petroleum (ELPE) – was the main focus of yesterday’s meeting.

Processing of seismic data collected from the Cretan offshore blocks has provided strong evidence of a deposit sharing similar attributes to Egypt’s Zohr gas field. However, this needs to be proved in practice. French officials have remained cautiously optimistic as they await initial drilling operations for a clearer picture.

Total’s plans for exploration within the Cypriot Exclusive Economic Zone, specifically at Block 8, for which Total shares a license with Italy’s Eni, were also discussed yesterday.

Turkish drillship Yavuz has sought to engage in illegal exploration activities in this area. French officials do not intend to intercept any Turkish moves at this stage but are expected to do so if the exploratory rights of Total and Eni are disputed once the companies decide to start exploring the area.

 

DEPA Infrastructure sale to be announced mid-December

Privatization fund TAIPED is preparing swift privatization action at gas utility DEPA to follow the government’s ratification of a restructuring plan at the company that will place for sale two new corporate entities, DEPA Trade and DEPA Infrastructure, emerging through this process.

A tender offering investors the Greek State’s 65 percent of DEPA Infrastructure – resulting from the Greek State’s equivalent stake in DEPA – will be announced no later than December 15, according to energypress sources.

Hellenic Petroleum ELPE’s 35 percent stake – resulting from the Greek State’s equivalent stake in DEPA – is expected to be included in the DEPA Infrastructure sale, sources noted. The petroleum group has indicated it is not interested in maintaining interests in DEPA Infrastructure. If this is so, then the potential buyer or buyers of DEPA Infrastructure will become full owner.

DEPA Infrastructure is the full owner of Attiki gas distributor, covering the wider Athens area, and DEDA, covering the rest of Greece. DEPA Infrastructure also holds a 51 percent stake in distributor EDA Thess (Thessaloniki and Thessaly). Italy’s ENI is the minority partner in this venture.

DEPA Infrastructure, through all its interests, has lined up a five-year investment program worth 250 million euros. Revenues at DEPA Infrastructure are regulated and worth a total of approximately 130 million euros.

Italy’s Italgas and Germany’s E.ON are believed to be among the potential bidders for DEPA Infrastructure. Belgium’s Fluxys and Spain’s Enagas, both part of a three-member consortium controlling Greek gas grid operator DESFA, may also participate in the DEPA Infrastructure sale.

The announcement of a sale procedure for DEPA Trade will follow and is expected by the end of January.

ELPE is not expected to offer its 35 percent stake to this sale, meaning bidders will most probably be bidding for the Greek State’s 65 percent.

The Mytilineos group, Motor Oil and a partnership comprised of Copelouzos and KKCG, the Czech company holding a stake in Greek lottery company OPAP, are seen as likely participants in the privatization fund’s ELPE Trade sale. International players ENI and Edison have also been mentioned by pundits.

 

Italian energy firms eyeing array of local investments, PM in Italy

Italian investors are displaying widespread interest for energy investments in the Greek market, including possible stakes in distribution network operator DEDDIE/HEDNO, power grid operator IPTO, gas utility DEPA’s two new entities DEPA Trade and DEPA Infrastructure, as well as joint ventures in wind energy stations, electric vehicle projects and smart grids.

Deputy energy minister Gerassimos Thomas, joining Prime Minister Kyriakos Mitsotakis on an official visit to Rome today, is expected to be informed of this Italian investment interest. Thomas is scheduled to meet with Italian economic development minister Stefano Patuanelli.

The Greek Prime Minister, to meet with his Italian counterpart Giuseppe Conte, can also expect to hear of this Italian investment interest during talks which, besides the refugee crisis, will also address cross-border energy projects such as TAP and East Med.

Snam maintains the most emblematic of Italian investments in the Greek market at present with a 66 percent stake in gas grid operator DESFA, including control of the country’s natural gas transmission and storage infrastructure.

Italian firms are regarded as pioneers in a number of green-energy domains, including smart grids, electric vehicle recharging station installations along highways, even wave power projects.

Just days ago, a consortium comprising Eni, Fincantieri and Terna announced it would commercially develop its pilot project Inertial Sea Wave Energy Converter (ISWEC) for wave energy generation, initially at small Italian islands, followed by projects abroad.

The Greek Prime Minister and his energy deputy will also meet with Italian entrepreneurs, including Eni gas e luce chief executive Alberto Chiarini.

Italy’s Terna, one of Europe’s biggest transmission system operators, is believed to be interested in acquiring a stake of IPTO and its Ariadne subsidiary, project promoter of the submarine Crete-Athens grid interconnection.

Enel is considering moves into networks, renewable energy investments and the electric vehicles sector.

Italgas, Italy’s biggest gas distributor and the continent’s third biggest, appears interested in DEPA Infrastructure. Italgas is believed to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Eni, increasing its involvement in pioneering projects, including wave energy, is believed to be looking to increase its Greek market presence, possibly through acquisitions.

 

 

EGL’s Zenith buy exceeding business objectives, further growth sought

Italian enterprise EGL’s (Eni gas e luce) decision to fully acquire the Zenith gas and electricity supply company, covering Greece’s north, constitutes part of a wider strategic objective for further growth as one of Europe’s biggest gas and electricity retailers, highly ranked company officials have noted.

The Zenith investment, exceeding targets, highlights the Greek market’s prospects, both in gas and electricity, Eni officials pointed out.

EGL, an Eni corporate group subsidiary active in retail electricity and natural gas, is supported by a 1,600-strong workforce and caters to over 9 million customers in Italy, Greece, France and Slovenia.

Eni gas e luce nowadays stands as Italy’s biggest retail supplier of natural gas and second-biggest supplier of electricity.

The company, placing particular emphasis on customer experience, quality of services and a richer experience of additional services, is introducing to the Greek market trends and innovations already implemented in more mature European energy markets.

Zenith will continue placing greater emphasis on strategic growth through investments aiming to widen the customer base rather than takeovers, company sources, both at the parent company and its Greek subsidiary, have underlined.

Italgas eyeing Eni’s 49% stake in EDA Thess, DEPA networks

Italgas, Italy’s biggest natural gas distributor, appears to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Though Eni maintains a favorable view of its business interests in EDA Thess, the retail-focused company’s involvement in networks is not its main international activity. EDA Thess is the sole gas distribution company in Eni’s portfolio.

Privatization procedures at Greek gas utility DEPA appear to have hastened the development. DEPA’s 51 percent stake in EDA Thess is set to be transferred to DEPA Infrastructure, one of two new entities, along with DEPA Trade, to emerge from a DEPA split ahead of the gas utility’s privatization.

The government is moving to privatize the Greek State’s prospective 65 percent in DEPA Infrastructure. The entire company may be sold if Hellenic Petroleum (ELPE), a 35 percent shareholder, joins this privatization.

Italgas is preparing to participate in the DEPA Infrastructure tender once it has acquired – if all goes well – Eni’s stake in EDA Thess, sources informed.

Eni gas e luce is awaiting Greek market developments and will then examine its options concerning the EDA Thess stake, including a possible sale, company officials have responded to media questions, without confirming any finalized deal.

Speaking to Reuters last week, Italgas chief Paolo Gallo informed the company intends to finalize a merger and acquisition agreement by the end of the year, or, possibly, in the first quarter of 2020.

 

ENI’s FSRU proposal latest Crete energy sufficiency idea

Italian energy giant ENI has come up with the latest proposal for a role in resolving Crete’s energy shortage threat, ascertaining it is ready to provide an FSRU unit for LNG storage and gasification that could be moored off the island.

High-polluting diesel generators operating on Crete, Greece’s biggest island, must cease operating by the end of this year, according to European Commission requirements.

The ENI proposal could cover the energy supply needs of power utility PPC diesel-fueled generators planned for conversion to natural gas, as well as a 100-MW gas-fired facility.

Prior to this interest from ENI, energy firms forwarded a series of proposals, all different, to counter the Cretan matter.

GEK Terna was the first to emerge with a recommendation entailing the transfer to Crete of Heron I, a power plant in the Viotia prefecture, northwest of Athens, offering a 150-MW capacity. Qatar’s Powerglobe followed with its Power4Crete proposal, an FSRU for electricity generation. Greek power utility PPC proposed an upgrade of its facilities on the island.

Also, Greek gas grid operator DESFA has included the establishment of a gas terminal at Atherinolakkos, southeastern Crete, into its development program.

Local players dividing interest for DEPA trade, network units

The country’s major energy sector players are more or less split in their investment interest for DEPA Trade and DEPA Infrastructure, the two new entities to emerge from gas utility DEPA’s privatization plan, but the overall interest for DEPA Trade appears to be more substantial.

The Mytilineos group, Motor Oil and the Copelouzos group have already expressed interest in DEPA Trade and will probably submit bids once the  tender is staged. Hellenic Petroleum ELPE, holding a 35 percent stake in DEPA, is also expected to express interest in DEPA Trade.

The emergence of foreign bidders cannot be ruled out as Greece’s natural gas market is gaining prominence as a hub for the wider region in southeast Europe.

As for the gas utility’s networks, Italy’s Eni, maintaining interests in the trade and distribution markets of Thessaloniki and the Thessaly region, is reported to be interested in DEPA Infrastructure. GEK Terna is also believed to be seriously considering this entity’s gas distribution prospects.

Besides the level of bids, the energy ministry will also take into account the respective business plans to be submitted by investors to the DEPA Infrastructure tender, the objective being to secure further network expansion covering new regions.

Details and procedures concerning the DEPA privatization plan have been included in a draft bill to soon be delivered to Greek Parliament. In the lead-up, the plan will be presented for public consultation, possibly beginning today.

Unlike the previous government’s plan, the Greek State’s entire 65 percent stake in DEPA will be offered through the two new entities.

The DEPA Trade and DEPA Infrastructure tenders are expected to be staged concurrently.

 

 

Total seeking buyer for its 50% stake in Block 2, west of Corfu

French oil and gas multinational Total appears to be preparing to sell its 50 percent stake in an offshore license west of Corfu, Block 2, preferring instead to focus on other hydrocarbon interests in Greece, west and southwest of Crete.

Total, the operator of Corfu’s Block 2 license, established a consortium for this venture with Edison and Hellenic Petroleum (ELPE), each holding 25 percent stakes.

This license was signed in October, 2017 following the launch of a tender in 2014 that offered a total of 20 offshore blocks in the Ionian Sea and south of Crete.

Total is in partnership with US major ExxonMobil and ELPE for its licenses west and southwest of Crete.

Recent activity in Cyprus’ Exclusive Economic Zone (EEZ) – an area in which Total has joined forces with Italy’s Eni to take on Block 7 – as well as developments in the wider eastern Mediterranean, has turned the French oil and gas giant’s attention to this region, sources told energypress.

Further changes are expected in the Greek market. ELPE is believed to be seeking partners for exploration and production licenses it has acquired alone.

 

EDEY to drum up Greek oil, gas hopes at Italy, Romania events

Spurred by recent significant gas field discoveries at Cypriot and Egyptian offshore blocks and the favorable prospects these have generated for the wider region, top officials at EDEY, the Greek Hydrocarbon Management Company, will be looking to attract major foreign investors to new Greek blocks at two industry events in Italy and Romania.

EDEY chairman Yiannis Basias, who is in Ravenna, Italy today to attend the Offshore Mediterranean Conference & Exhibition, a leading industry event, will be exploring the potential interest of oil majors, including Italy’s ENI, for new offshore blocks in the Ionian Sea and off Crete to soon be licensed out.

EDEY chief’s deputy Spyros Bellas will follow up this effort in Bucharest at the Balkans & Black Sea Cooperation Forum, scheduled to take place April 4 and 5.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, hailed the wider region’s prospects at the recent Delphi Economic Forum in Greece. ExxonMobil is currently involved in exploration work being carried out in Romania.

Speaking earlier this month at London’s Global APPEX (Prospect & Property Expo), an event organized by the American Association of Petroleum Geologists (AAPG), Bellas, EDEY’s deputy, presented a road map of Greece’s hydrocarbon plans for 2019 to officials of foreign companies as well as latest and more detailed geological data on the Ionian Sea and Cretan regions. This data was processed by Norway’s PGS.

The strategy adopted at EDEY is to plan tenders for offshore blocks based on the interest expressed by foreign investors at this series of meetings.

Besides ENI and ExxonMobil, EDEY is seeking to convince Repsol, Shell and other US majors of Greece’s hydrocarbon prospects.

 

 

Tougher inspection may delay DEPA-Shell deal, privatization

A recent takeover agreement between Greek gas utility DEPA and Shell concerning the former’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area could be delayed, if not forced to change, by local Competition Committee concerns over the deal’s impact on market competition. Subsequently, a privatization plan for DEPA could also be delayed.

The committee is considering launching a full-scale inspection on the resulting accumulation of power the agreement with Shell would offer DEPA, already holding a 51 percent majority in these Athens supply and distribution ventures prior to the deal.

According to sources, the gas utility is expecting a committee decision, on whether to conduct an in-depth investigation or clear the deal, on September 17. Should a full-scale inspection be launched, the committee will have 90 days to deliver a decision. If this period elapses, then the DEPA-Shell agreement will be automatically approved.

In July, DEPA announced it had agreed to acquire Shell’s 49 percent in the EPA Attiki gas supply and EDA Attiki gas distribution ventures for 150 million euros.

On another front, the Greek gas utility’s withdrawal from the Zenith gas supply company covering the country’s north, through the sale, for 57 million euros, of a 51 percent stake in this venture to Italy’s Eni, previously a minority partner with a 49 percent share, has been endorsed.

DEPA sale schedule now rests with Competition Committee

An on-schedule launch of the DEPA gas utility’s privatization procedure will depend on the time it will take the Competition Committee to approve a recent local takeover agreement between DEPA and Shell concerning the Greek gas utility’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area.

DEPA went into the negotiations with Shell already holding 51 percent stakes in these joint ventures. The deal was reached for a price of 150 million euros.

If the Competition Committee approves the DEPA-Shell agreement by September, then the DEPA privatization could begin on schedule, in September or October, with the gas utility’s split into two firms, DEPA Infrastructure and DEPA Trade, as agreed to by the government and the country’s lenders for the privatization.

According to the plan, a 50.1 percent stake of the trading firm is expected to be offered to investors while 14.9 percent, including veto rights, will be maintained by the Greek State. As a second stage of the privatization, the Greek State’s offering to investors of DEPA Infrastructure will be limited to a minority stake of no less than 14 percent. The Greek State is expected to retain a 51 percent stake in DEPA Infrastructure.

The gas utility’s privatization procedure will most likely be delayed until 2019 if the Competition Committee requires an extended period to examine the DEPA-Shell agreement.

Pundits closely following the developments have not ruled out delays in the DEPA privatization procedure.

Greek petroleum group Motor Oil Hellas lodged an official complaint to the Competition Committee over the DEPA-Shell agreement while it was still in the making, noting it would enable DEPA to dominate natural gas supply in the wider Athens area. Motor Oil plans to soon enter Greece’s natural gas retail market through its subsidiary Coral (Shell).

DEPA, whose repositioning in Greece’s natural gas retail market was included as a bailout term, has also reached a deal with Italy’s Eni. DEPA agreed to withdraw from the Zenith gas supply company covering the country’s north by selling its 51 percent stake in this venture to the Italian firm, previously a minority partner with a 49 percent share.

At least three key players, Mytilineos, the Copelouzos group and ELPE, which already holds a 35 percent stake in DEPA, have expressed an unofficial interest for DEPA Trade.

These players, as well as others who have yet to disclose their interest, all see DEPA Trade as an enterprise that is ready for robust business given DEPA’s experience, existing customer base and foreign deals. More crucially, the investors also see a company that is soon expected to wholly own the EPA and EDA supply and distribution firms which, until recently, monopolized the retail gas market in the wider Athens area.

 

DEPA, Shell agreement to be finalized next week

An agreement reached between DEPA, public gas corporation, and Shell, for the Greek gas utility’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area, is expected to be finalized next week.

The gas utility’s shareholders – TAIPED, the state privatization fund, controlling 65 percent of DEPA, and ELPE (Hellenic Petroleum), holding the other 35 percent – are expected to approve the agreement at a shareholders’ meeting on Tuesday, energypress sources have informed, which will clear the way for DEPA and Shell to sign their local takeover agreement. Less than a fortnight ago, the DEPA board approved the DEPA-Shell agreement.

Once the two sides have signed, the agreement will be forwarded to the competition committee for approval, not expected any sooner than August.

As has been previously reported by energypress, DEPA’s takeover agreement with Shell was reached for 150 million euros – approximately 39 million euros for the EPA gas supply company and 111 million euros for the EDA distribution company. The total amount is within the value range estimated by the gas utility’s consultants – close to the lower end.

In another agreement, DEPA stands to collect 52 million euros for the sale of its 51 percent stake in the Zenith gas supply company in the north to Italy’s Eni, plus five million euros for dividends. This amount is also within the gas utility’s evaluation range – towards the higher end.

The finalization of all three agreements represents the completion of the first stage of DEPA’s transformation. The next step will entail splitting the gas company into two firms, DEPA Infrastructure and DEPA Trade, before selling 51 percent of the trading firm.

“The next stage, once again protecting the interests of the company, shareholders, workers, as well as DEPA’s historic role in the transmission of natural gas in Greece, begins now,” an official with a key role in the developments told energypress.

DEPA board unanimously OKs Shell local takeover agreement

The board at DEPA, the public gas corporation, yesterday unanimously approved an agreement reached with Shell just days ago following prolonged negotiations for the gas utility’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area.

This development had been preceded by DEPA’s finalized agreement with Italy’s Eni for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith. This agreement is now being examined by the competition committee. A final decision is expected by the end of this month.

Returning to DEPA’s agreement with Shell, the gas utility’s shareholders – TAIPED, the state privatization fund, controls 65 percent and ELPE, Hellenic Petroleum, the other 35 percent – are expected to decide within the next fortnight before this agreement is forwarded to the competition committee for approval. A finalized decision by the committee is anticipated by August.

The agreement between DEPA and Shell was reached for 150 million euros – approximately 40 million euros for the EPA gas supply company and 110 million euros for the EDA distribution company. The total amount is within DEPA’s evaluation range – close to the lower end.

DEPA stands to collect 52 million euros for the sale of its 51 percent in the Zenith gas supply company in the north to Eni, plus five million euros for dividends. This amount is also within the gas utility’s evaluation range, towards the higher end, according to data provided by the utility’s financial advisers.

DEPA’s three agreements, heralded as a major achievement by the government, given the bailout’s prior action restrictions and deadlines, represent the completion of the first stage of the gas utility’s transformation following its withdrawal from the retail gas market in Greece’s north and bolstered position in the wider Athens market.  These agreements now clear the way for the commencement of DEPA’s privatization.

The gas utility realized, from early on, that it would need to reinforce its standing in infrastructure and realign itself in the retail gas market to remain competitive amid the newly liberalized, competitive market, pundits told energypress.

DEPA also needed to find solutions to meet bailout obligations, their objective more or less being to break the gas utility’s local dominance, which is why the company worked closely with the energy ministry on many position papers, negotiations with the lenders and board decisions.

 

 

DEPA strikes takeover deal with Shell, guarantees included

DEPA, the public gas corporation, and Shell concluded long-running negotiations over the weekend for the former’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area.

The two sides needed to stretch a June 6 deadline agreed to by the government and country’s lenders before striking a deal. It is expected to be approved by the DEPA board tomorrow while an extraordinary shareholders’ meeting is expected to immediately follow for final approval. TAIPED, the state privatization fund, now control’s DEPA’s 65 percent and ELPE (Hellenic Petroleum) holds the other 35 percent.

The agreement between DEPA and Shell was reached for 150 million euros, as had become widely known long before the weekend’s deal.

Following much resistance, the Dutch firm ended up providing long-term guarantees covering any pending tax issues that may arise in the future, including tax matters or accidents resulting from faulty infrastructure development. Also, Shell has committed to terms that would block any future market reentry attempt by the Dutch firm, including indirectly, as a member of an investment scheme, or via any special purpose vehicle (SPV).

Shell was represented in its EPA Attiki joint venture with DEPA, the majority partner with a 51 percent stake, through a special purpose vehicle (SPV).

Once finalized, the DEPA-Shell deal will need to be endorsed by the European Commission’s Directorate General for Competition. The same goes for DEPA’s agreement already reached with Italy’s ENI for the latter’s acquisition of the Greek gas utility’s 51 percent in the EPA Thessaloniki-Thessaly gas supply company. ENI initially went into this joint venture holding a 49 percent stake and now stands to gain full control of the gas supply firm for 57 million euros. However, DEPA will maintain its 51 percent stake in the EDA distribution company covering the Thessaloniki-Thessaly area.

The completion of all these matters will enable the DEPA privatization plan, to offer investors two separate subsidiraries representing the utility’s trading and infrastructure divisions, to go ahead. According to energy ministry sources, DEPA’s considerable cash deposits for 2017, totaling 250 million euros, will be divided between the two prospective subsidiaries.

The Greek State intends to sell a 50.1 percent stake of DEPA’s trading subsidiary, which is expected to draw major investor interest, and retain a 14.9 percent for veto rights concerning matters of strategic importance, especially international gas supply agreements. Two major Greek players, Mytilineos and ELPE, as well as European firms have already expressed interest.

As for DEPA’s infrastructure subsidiary, the Greek State will initially maintain its current stake of 65 percent and, depending on decisions to be taken at ELPE for its 35 percent stake in the gas utility, could sell a 14 percent stake to keep 51 percent.

Recent competition committee action taken by Motor Oil to protested  DEPA’s EPA Attiki takeover plan, promising to give the gas utility control of the wholesale and supply markets in the wider Athens area, could prove to be an obstacle.

Speaking on the sidelines of an Economist conference in Athens last week, energy ministry officials appeared unperturbed. They pointed out that DEPA’s presence is being reduced to one supply firm from two, while adding this development will be followed by the sale of a majority stake in DEPA’s prospective subsidiary representing the trading division.

 

 

 

 

DEPA sale to spill over into 2019, many steps still needed

Revisions presented to a parliamentary committee last week for a complete ownership split of DEPA, the public gas corporation, and DESFA, the natural gas grid operator, promise to settle a pending bailout-related issue concerning distribution network ownership but many steps still lie ahead before the DEPA privatization, another bailout demand, is completed.

Although the government has included this sale’s proceeds in the 2018 national budget, the privatization is not expected to be finalized until 2019. Pending issues include the need to split of the gas utility’s commercial and distribution network divisions into two companies.

The energy ministry and country’s lenders agreed on a DEPA privatization model during recent fourth-review bailout negotiations but its specifics still need to be determined. The precise DEPA stake to remain with the Greek State and the sale’s time frame both remain undetermined.

Government officials have already unofficially admitted that it will be extremely difficult to announce two DEPA tenders offering investors stakes in the company’s trading and distribution network divisions within 2018, let alone collect the sale’s budgeted amount within the current year.

Negotiations between DEPA and Italy’s Eni for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith, have been completed. DEPA previously held a 51 percent stake in this venture and Eni the other 49 percent.

However, DEPA has yet to finalize an agreement with Shell concerning the utility’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution companies covering the wider Athens area. DEPA currently holds 51 percent shares in these ventures.

DEPA’s agreements with Eni and Shell both need to be completed to clear the way for the privatization. Furthermore, both agreements will require approval from related supervisory bodies, including the European Commission’s Directorate General for Competition. It is estimated the required approvals cannot be completed sooner than autumn.

The ongoing bailout-required sale of a 50.5 percent stake of ELPE (Hellenic Petroleum), which holds a 35 percent share of DEPA, is another crucial pending issue.

Also, related legislation will need to be ratified before DEPA’s tenders offering investors stakes in the prospective commercial and distribution network companies are announced.

Given all these pending steps, the DEPA tender for the commercial division could  be launched within 2018 but, realistically, the sale concerning the distribution network cannot be announced any sooner than early 2019.

 

 

 

 

Major traders, Socar tipped to submit first-round ELPE bids

Two of the world’s biggest commodity traders, Dutch firm Vitol and Switzerland’s Glencore, will probably feature among the participants to officially express interest in ELPE’s (Hellenic Petroleum) international tender offering a 50.1 percent stake of the enterprise, according to latest information provided by sources.

The deadline for non-binding offers expires today following an extension of a previous May 18 deadline.

Besides the aforementioned commodity traders, Azerbaijan’s state-run energy firm Socar, joined by a European firm, possibly Spanish, is also tipped to declare non-binding interest in the bailout-required ELPE sale, sources have informed. This would represent a surprise development.

Socar had taken part in a previous DESFA (natural gas grid operator) sale and was declared the winning bidder before its long-running acquisition attempt was blocked by European Commission competition concerns.

News on the possible participation of major European energy players is not good. European petroleum groups such as Italy’s Eni, Hungary’s MOL, France’s Total, and, possibly, Spain’s Repsol, have reached decisions to not submit initial expressions of interest for the ELPE sale, according to energy market pundits.

A clearer picture on the sale’s preliminary turnout is expected later in the day when TAIPED, the state privatization fund, is expected to announce the list of first-round bidders.

 

 

DEPA, Eni to sign deal today, Shell selling its stake for €150m

Months-long negotiations between DEPA, the public gas corporation, and Italy’s Eni for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith, are expected to be completed today with the signing of a finalized agreement.

Until now, DEPA has held a 51 percent stake in this venture and Eni the other 49 percent. No changes are expected to be made to the EDA Thessaloniki-Thessaly gas distribution company. DEPA and Eni will retain their respective 51 and 49 percent stakes in this venture.

Not unintentionally, the timing of the deal’s anticipated completion coincides with a meeting in Athens today between energy minister Giorgos Stathakis and the country’s lender representatives. Greek officials are keen to send a signal to the troika that pending bailout issues at the energy ministry are being settled.

DEPA also appears to have been reached an agreement with Shell to acquire the latter’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution companies covering the wider Athens area. DEPA currently holds 51 percent shares in these ventures. The two sides held marathon talks yesterday. Pending issues appear to have been settled while, according to sources, the agreement is worth 150 million euros.

The government and lenders still need to agree on the resulting market structure following these rearrangements before a DEPA-Shell deal can be officially announced. DEPA would fully control EPA and EDA Attiki and hold a majority stake in EDA Thessaloniki-Thessaly.

The finalization of DEPA’s future roles in all the aforementioned ventures will enable officials to begin discussing and implementing the gas utility’s privatization model. This sale is planned to offer investors a 65 percent stake.

A meeting today to involve Stathakis, the energy minister, finance minister Euclid Tsakalotos and the lenders will indicate whether a Greek proposal for the DEPA privatization stands a chance of being accepted.

An alternative DEPA privatization plan prepared by the energy minister entails the establishment of a holding company to serve as an umbrella for three new subsidiaries respectively covering commercial, distribution and international projects divisions.

A number of local officials have questioned whether this plan can raise the privatization funds expected from DEPA as the proposal, restricting investors to a minority stake of DEPA’s networks, is seen as unattractive.

A second idea has also been tabled. It entails the establishment of two subsidiaries, one representing DEPA’s networks and the other the firm’s commercial division, without a holding company. Each subsidiary would be sold separately to represent a 65 percent privatization. This proposal recognizes that the gas networks and commerce are two different markets. Some investors may focus on the networks and others on the commercial side.

Apart from the privatization model that needs to be adopted for DEPA, ELPE (Hellenic Petroleum), which holds a 35 percent stake of this gas utility, also needs to make its position clear.

ELPE officials have told energypress that retaining a minority role in DEPA is pointless for the enterprise, while suggesting ELPE would withdraw from its DEPA interests if the price is right.

ELPE is interested in the natural gas market but only as a majority shareholder with managerial control, the officials explained.

 

 

 

Eni set to sign deal with DEPA for EPA Thessaloniki-Thessaly

DEPA, the public gas corporation, and Italy’s Eni have finalized an agreement for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith, energypress sources have informed.

Until now, DEPA was the majority shareholder of this venture with a 51 percent stake and Eni held the other 49 percent.

The same sources noted that the DEPA board intends to endorse the agreement at a meeting tomorrow ahead of its signing next week – either Tuesday or Wednesday.

Next week’s anticipated signing ceremony will coincide with a visit to Athens by troika officials for negotiations with the Greek government on pending bailout issues, including energy sector matters.

No changes will be made to the EDA Thessaloniki-Thessaly gas distribution company. DEPA and Eni will retain their respective 51 and 49 percent stakes in this venture.

DEPA is also negotiating with Shell to acquire the latter’s 49 percent share in their EPA Attiki gas supply company covering the wider Athens area. DEPA currently holds a 51 percent stake in this enterprise.

According to sources, certain details remain unresolved but an EPA Attiki agreement is expected to be inked by the two sides just days after the EPA Thessaloniki-Thessaly deal has been signed.

The shareholders of all companies involved will need to approve these agreements. The competition committee must also endorse them.

The completion of the EPA Thessaloniki-Thessaly and EPA Attiki agreements, satisfying natural gas market supply and distribution demands set by the country’s lenders, will enable the bailout-required DEPA privatization to proceed.

Energy minister Giorgos Stathakis has already announced that he will present, next week, to the lender representatives, a DEPA holding company plan to serve as an umbrella for three new subsidiaries respectively covering commercial, distribution and international projects divisions. The plan entails listing the holding company on the bourse while the possible involvement of a strategic investor in the subsidiary covering commercial matters will be examined.

It remains to be been how the troika will react to the energy minister’s proposal.

 

 

 

 

Finalized DEPA privatization plan needed, time pressuring

With time pressure growing and one alternative plan after another being worked and reworked by Greek authorities for the bailout-required privatization at DEPA, the public gas corporation, officials at TAIPED, the state privatization fund, the gas utility and energy ministry are likely to meet during the week to forge a finalized plan.

Greece’s obligation to sell a 65 percent stake will remain the basis of the plan, but  alternatives of equivalent worth will be sought. At least two alternatives have so far being proposed. The energy ministry and DEPA appear to favor establishing a holding company to be comprised of three subsidiaries and be eligible for a listing on the bourse.

According to this plan, one of the three subsidiaries will control the DEPA networks and a strategic investor could cquire a minority stake. The second subsidiary would take on commercial affairs but a majority stake could be sold to investors. The third subsidiary would remain a part of the holding company and control major projects.

According to DEPA sources, this option is the most preferred.

DEPA still needs to finalize negotiations concerning changes at its supply and distribution ventures with local partners Shell and Eni before the privatization procedure can proceed.

DEPA is expected to withdraw from the EPA supply company covering Greece’s north and remain a part of the distribution company, EDA Thess. DEPA holds 51 percent stakes in these ventures and Italy’s Eni the other 49 percent.

DEPA is also expected to acquire Shell’s 49 percent in EPA Attiki and EDA Attiki, two ventures serving the wider Athens area. DEPA also holds respective 51 percent stakes in these.

An announcement by DEPA and Shell is expected imminently, sources have informed. A price tag of nearly 150 million euros is expected to be attached to Shell’s withdrawal. Other details remain undisclosed.

 

 

Repsol, Eni among investors interested in ELPE’s 50.1%

Repsol is seriously considering taking part in an international tender offering 50.1 percent of ELPE (Hellenic Petrolem), announced just days ago, energypress sources have informed.

The Spanish company, already active in Greece’s hydrocarbon exploration and production market, recently formed a partnership with ELPE to submit a joint bid for an offshore block in the Ionian Sea.

Repsol meets all the ELPE tender’s strict criteria – financial, technical and geopolitical – set by TAIPED, the state privatization fund, in association with the sellers, the Greek State and Paneuropean Oil, a member of the Latsis group.

The Spanish firm maintains a strong presence in the refining sector. Its investments in this domain have totalled some 4 billion euros over the past few years. Repsol operates six industrial refineries. In 2016, Repsol’s assets were worth a total of 39.2 billion euros while the enterprise posted a total turnover figure of 36.3 billion euros and an operating profit of over two billion euros.

In the exploration and production field, Repsol has certified deposits of 2.3 billion barrels and is producing 690,000 bpd. Its refining capacity exceeds one mllion bpd.

Another major European petroleum firm, Italy’s Eni, is also believed to be closely monitoring the ELPE tender.

According to the tender’s terms, investors must be able to prove they possess readily available investment amounts worth at least two billion euros.

TAIPED reserves the right to eliminate any interested investor if such a course of action is deemed necessary by the Greek State for protection of national interests, energy securtity and energy supply.

A May 18 deadline has been set for first-round offers. Interested parties have until May 9 to enquire about the international tender’s terms.

 

 

 

Holding company plan tabled for DEPA privatization

DEPA, the public gas corporation, and local partner Shell are aiming to finalize and announce an agreement by the end of the month, possibly within the current week, for the latter’s withdrawal from their EPA Attiki and EDA Attiki gas supply and distribution joint ventures serving the wider Athens area.

Though details have not been disclosed, the imminent agreement is said to be worth nearly 150 million euros. Shell currently holds 49 percent stakes in these partnerships.

DEPA has already reached an agreement for Greece’s north for a still unspecified retreat from EPA Thessaloniki-Thessaly. This venture’s Italian partner Eni, currently holding a 49 percent stake, is expected to increase its share.

Once both agreements have been finalized and announced, a bailout-required privatization plan for DEPA will proceed.

TAIPED, the state privatization fund, has agreed that the original DEPA plan, entailing the sale of a 65 percent stake, is not an ideal option, DEPA officals told energypress.

A preferable alternative, or establishment of a holding company comprised of three subsidaries that could be partially listed on the bourse, has been presented by DEPA to TAIPED. The position of the lenders is not known.

According to the proposal, one of the three subsidiaries would control the networks, the second would be responsible for commercial matters, and the third would remain under the holding company and control major energy projects.

Preliminary DEPA privatization procedures lacking urgency

Preliminary procedures needed for the privatization of DEPA, the Public Gas Corporation, are not making satisfactory progress, officials monitoring the procedure have observed.

A formula for a reduction of the gas utility’s retail gas market presence has been established, but beyond that, little progress has been achieved. Officials at the finance ministry and TAIPED, the state privatization fund, are still awaiting the next vital step leading to this plan’s actualization, dependent on DEPA and its two supply and distribution partners Shell and Eni.

For quite some time now, DEPA and Shell have agreed on a road map for the former’s acquisition of the latter’s 49 percent stake in EPA Attiki and EDA Attiki supply and distribution ventures covering the wider Athens area. DEPA currently holds a majority 51 percent stake. However, as the weeks go by, the two sides have yet to agree on a sale price for the stakes held by Shell in these ventures.

DEPA and Shell have agreed on an evaluation formula concerning this transaction, as well as a back-up plan should there be any disagreement on the price.

The two sides are expected to have agreed on a sale price by the end of March, according to the bailout schedule. The evaluation process leading to this price tag has yet to be launched in earnest.

Besides the Shell partnership, DEPA also needs to finalize a deal with Italy’s Eni, which holds a 49 percent in EPA Thessaloniki-Thessaly. DEPA intends to sell all or most of its 51 percent share in this venture to Eni. DEPA’s future in EDA Thessaloniki-Thessaly remains unclear.

Alternative plans supported by the energy ministry for DEPA’s privatization appear to have waned, meaning that an initial plan for a strategic investor to acquire the Greek State’s 65 percent stake in DEPA will be pursued.

The finance ministry’s position on the DEPA privatization, as well as that of ELPE (Hellenic Petroleum) is pivotal. Finance Minister Euclid Tsakalotos is well aware of how seriously the lenders view these privatizations for the bailout procedure, including prospective relief measures.

A lack of cohesion amid the government’s ranks on the privatizations has become apparent. Just days ago, when he emerged from a meeting with lenders on the privatizations, Tsakalotos, when enquired about the DEPA alternatives proposed by Stathakis, the energy minister, responded: “Ask him”.