PPC lignite units sale to await country’s next administration

Prime Minister Alexis Tsipras’ announcement last night of a pre-election period leading to national elections expected on June 30 effectively ends any hope of an on-schedule completion of power utility PPC’s sale of lignite units.

Participants of the bailout-required disinvestment, which had been relaunched after an initial sale attempt failed to produce a result, were due to submit binding bids by tomorrow. But, given the political developments, the process will now need to be taken on by the country’s next administration.

Political landscape aside, the sale’s participants, troubled by unfavorable conditions,  have appeared unwilling to offer sizable amounts for the PPC units.

Had the PPC sale process not been interrupted by last night’s election announcement, its success would have depended on the government’s ability to handle the political cost of a low-priced sale.

The ongoing effort aiming to liberalize Greece’s electricity market will now most likely need to be re-examined along with a restructuring plan for PPC’s rebound as a sustainable enterprise.

ELPE Arta-Preveza survey hit by local election interests

Hellenic Petroleum ELPE’s plan to conduct seismic surveys at an onshore license in northwestern Greece’s Arta-Preveza area appears to have run into problems of disproportionate dimensions as a result of resistance by a small number of local residents and other objectors accustomed to opposing such initiatives.

Local authorities, mindful of upcoming municipal elections in May, are paying heed to the danger-mongering of these teams of people, resulting in serious issues for ELPE’s overall hydrocarbon exploration program.

ELPE had already provided local authorities with detailed information supporting the region and its residents would not be impacted in any way by the prospective seismic survey work.

Until recently, local officials, convinced by the ELPE presentation, were prepared to recommend that a license be granted to the petroleum company for its survey work. Instead, local councils of two municipalities in the wider region, Arta and Central Tzoumerka, refused to offer their consent.

As a result, ELPE’s seismic survey plan for Arta-Preveza now appears headed for a delay until after the elections, which will have a knock-on effect on the company’s next scheduled seismic survey, in northern Peloponnese.

Greece must not miss out on the opportunity of discovering major deposits and entering the global petroleum map, which would attract oil majors, industry officials have noted.

Early elections not a threat for ELPE sale, officials assure

Greek privatization procedures already at a mature stage and not requiring any legislative revisions or presidential decrees, such as the ongoing ELPE (Hellenic Petroleum) sale, would not be affected by early elections ahead of the completion of the government’s four-year mandate in October 2019, even if these were to be held as early as March, prospective buyers in the ELPE sale, offering a 50.1 percent stake, have been assured by the privatization fund TAIPED in response to questions on the matter.

Two new participants, US firm Carlyle and Algeria’s Sonatrach, are believed to have established respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol. However, to date, no official announcements have been made on the Glencore-Carlyle and Vitol-Sonatrach pairings.

If verified, the ELPE sale’s new entries can be expected to raise hopes for higher offers when binding bids are submitted at a still-unspecified date within January.

DEPA distribution network sale not possible before 2020

The sale of a prospective DEPA (public gas corporation) subsidiary representing the firm’s distribution network appears likely to be passed on to the country’s next administration to emerge from national elections due in a little over a year, an official schedule prepared by TAIPED, the state privatization fund, for this privatization has shown.

The DEPA privatization model will include another subsidiary representing the gas utility’s commercial division, which will represent the first part of a two-step sale process.

According to TAIPED’s new strategic plan for the DEPA sale, the privatization process of the subsidiary representing the utility’s commercial section will begin this November and offer investors a 50.1 percent stake. The procedure for the sale of the subsidiary representing DEPA’s distribution network will not begin until the initial sale has been completed.

Investors will be offered either a 14 percent stake of DEPA’s distribution network subsidiary or 49 percent if ELPE, holding a 35 percent share of DEPA, decides to include its stake in the privatization.

Authorities will require a period of at least two months to assess November’s first-round expressions of interest concerning the commercial division subsidiary, meaning that the procedure’s second round should begin in January, 2019. Qualifiers will then need between one and two months to submit their binding offers, estimated to occur in March, 2019. Even if a preferred bidder is declared in May, for example, the transfer agreement is not expected to be completed any time before autumn in 2019 as the Court of Auditors as well as local and EU competition committees will all need to offer their approval.

This procedure will coincide with the national elections, a period during which it will be impossible to launch the follow-up privatization offering a stake of DEPA’s distribution network. Presumably, the procedure will be brought to an inevitable standstill and deferred for late in 2019 or early 2020. If the current administration is not reelected, then the new administration could push to renegotiate the DEPA privatization plan with the country’s lenders.

Looming PPC unit sales testing coalition’s political endurance

An anticipated reaction by main power utility PPC union members and coalition MPs opposing the energy ministry’s acceptance of a demand by the country’s lenders for the sale of a substantial proportion of the utility’s producing capacity is expected to test the government’s political endurance.

The news of prospective PPC lignite-fired unit sales brought back to Greece by energy minister Giorgos Stathakis from a meeting in Brussels just a few days ago has sparked anger within the ranks of the utility’s Genop union and among MPs of the coalition, holding just a slim majority in Greek Parliament.

Though the minister accepted the PPC unit sales demand made by the lenders, seen as a compromise that may help conclude the bailout’s prolonged second review, a final agreement on the unit sales plan will not be approved by the Greek government unless Prime Minister Alexis Tsipras and his close associates deem that the discontent prompted within his Syriza party’s ranks can be managed at a political level.

Stathakis, the energy minister, held a meeting yesterday with one of the Syriza MPs opposing his acceptance of the PPC unit sales demand by lenders. The MP, Kostas Seltsas, representing a seat in the Florina region of northern Greece, was told that the government is facing relentless pressure by the lenders. Stathakis has lined up more meetings with concerned MPs today.

One seasoned MP of the main opposition conservative New Democracy party told energypress that the coalition had made too many sacrifices to stop now. The sale of a mere few PPC units represents just a small addition to the country’s overall sacrifice, the conservative MP noted, contending that the development is “controllable”.

A market test to be conducted in September in order to measure the level of interest of potential buyers is expected to determine which PPC units will be put up for sale. Besides lignite-fired units, hydropower stations may also be included in the sale package.

From a political perspective, this means that any challenge to be faced by the coalition will not need to be dealt with until a few months later, in December, when the PPC sale package is tabled in Parliament for ratification.


US president Obama stresses need for Greek debt relief

US President Barack Obama, during a meeting in Athens today with Greek Prime Minister Alexis Tsipras, congratulated the Greek government and the Greek people for moving forward through a very challenging period.

“My hope is that given the growth we saw this year, we can build on that progress. The reforms have not been easy but have been necessary to boost the competitiveness of the economy… In my message to the rest of Europe I will continue to emphasize our view that austerity alone cannot deliver prosperity,” he said, stressing the need for debt relief.

“It is going to be important both with respect to debt relief and other accommodative strategies to help the Greek people during this period of adjustment,” Obama added.

On his part, Prime Minister Alexis Tsipras noted: “It is a great honor that you visit Greece during your final Europe tour, giving a special message to the world.”

Referring to the economic crisis, Tsipras said that Greece “stands strong and will continue, despite the difficulties over the last 5 years.”

The US President said the US hopes to work with Greece, Turkey and other interested parties to support and encourage a just and durable solution for the Cyprus issue and expressed his deep appreciation for the compassion shown by Greek people to the refugees.

He also voiced the US’s commitment to cooperate and assist Greece in implementing the programs that have reduced refugee inflows and emphasized the need to “assist these people who are in enormous need even as we try to resolve the issues that have led to the crisis.”


Giorgos Stathakis named coalition’s new energy minister

Giorgos Stathakis has been named the country’s new Environment and Energy minister as part of a government’s reshuffle, announced late Friday night.

Stathakis, who previously headed the coalition’s Economy, Infrastructure, Shipping and Tourism Ministry, replaces Panos Skourletis, now in charge of the Ministry of Interior.

Sokratis Famelos, appointed Stathakis’s deputy, will handle the ministry’s environmental issues.

“Challenges lie ahead,” Stathakis noted after been sworn into office. “The spirit of this government is all about pressing ahead with things that need to be changed and will be changed.”

Geopolitical activity heightens for TAP work launch ceremony

Tomorrow’s ceremony to launch construction work for the Greek segment of TAP (Trans Adriatic Pipeline) carries double symbolic meaning. On the one hand, it will mark the first concrete step of a project pivotal to the government’s long-heralded energy policy seeking to establish Greece as a regional energy hub and gateway to the Balkans. On the other hand, the launch for the TAP project, promising 1.5 billion euros of direct private-sector investments, provides Greece with needed investment credibility at a crucial time. The first review of the country’s third bailout package is approaching completion and the government is pursuing a multi-leveled effort to attract investments to Greece’s battered economy.

Officials are expected to maneuver on the sidelines of the ceremony in Thessaloniki, today, tomorrow and Wednesday, especially for energy-sector projects still not confirmed, such as the Greek-Bulgarian IGB natural gas pipeline project and the floating LNG terminal in Alexandroupoli, northeastern Greece.

The country’s energy minister Panos Skourletis will have the opportunity to meet with interested parties and propel the prospects of these projects. A planned meeting with his Bulgarian counterpart Temenuzhka Petkova ranks as one of the most vital on the minister’s agenda. Besides the LNG station in Alexandroupoli, the two ministers are expected to also discuss the prospective IGB project, set to enter a crucial second-round market test requiring binding offers from interested traders, probably around June or July.

Meetings will also be held with a delegation representing US firm Cheniere Energy, primarily active in LNG-related businesses, which is seemingly showing renewed interest in the Alexandroupoli project. It remains to be seen whether Cheniere could limit its involvement to trading activity or also take on some risk by investing in the LNG station’s development.

As has been announced, the Greek energy minsiter’s agenda also includes meetings with Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs, Maros Sefcovic, the European Commission vice president responsible for Energy Union, and Ian Bradshaw, TAP’s Managing Director.

Also, according to Azeri media reports, Socar president Rovnag Abdullayev, expected in Thessaloniki for the TAP ceremony, will meet with Greek government officials on the delayed sale of DESFA, Greece’s natural gas grid operator, stagnant over the past three years following European Commission intervention over EU competition and energy security concerns. Socar had agreed to acquire a 66 percent stake of DESFA as the winning bidder of an international tender before Brussels stepped in to demand that the Azeri company surrender 17 percent to a European operator.

The TAP pipeline, planned to run a total of 773 kilometers, including 550 kilometers within Greece, across the country’s north, is scheduled to begin operating in 2019. It will carry natural gas from the Shah Deniz II deposit to the Balkans and Europe.

A total of some 150 Greek firms are expected to be commissioned contracts and sub-contracts for the TAP project’s construction, to create an estimated 8,000 jobs in Greece.


Alarming level of PPC arrears may rise to 2.5bn euros, ND official warns

Main power utility PPC’s alarming level of unpaid overdue electricity bills owed by consumers could be set to rise further, to as much as 2.5 billion euros, the main opposition conservative New Democracy party’s official in charge of energy matters has warned.

The ND party official, Kostas Skrekas, in a related written question submitted to Parliament, states that provisions for bad debts during the first nine-month period of 2015 increased by 407.7 million euros compared to the equivalent period a year earlier, which represents a 210 percent increase.

Skrekas, whose question was signed by 26 MPs and was critical of the Syriza-led coalition’s policies implemented over the past year or so, also forecasts that the level of unpaid overdue electricity bills owed by consumers for 2015 will range between 2.3 billion euros and 2.5 billion euros, up by as much as 700 million euros compared to 2014.

Campaigning by Prime Minister Alexis Tsipras and other members of the Syriza and Independent Greeks parties – while they were still in opposition – urging citizens to not pay bills, has now created tragic financial problems for the country’s main power utility, Skrekas notes.

Consequences, according to Skrekas, include the inability by local authorities to reduce the Public Service Compensation (YKO) surcharge imposed on electricity bills – household and professional – by at least 300 million euros, annually, despite the significant drop in oil and natural gas prices, as PPC’s administration has admitted.

Other effects included a freeze on PPC’s facility upgrade investments, which would reduce emissions and production costs for the utility; a possible increase of the utility’s borrowing costs, detrimental for its level of competitiveness; as well as a dramatic drop in the corporate worth of PPC, one of the Greek state’s most prized assets, the ND party’s chief energy official contends.

In the statement, Skrekas poses a long list of questions, including how the government intends to ease the power utility’s level of unpaid overdue electricity bills; boost the corporation’s market worth; support households that have sunk into poverty over the past thirteen months of Syrize-led rule; soften Public Service Compensation amounts burdening households and professionals; and create robust,  transparent competition in local electricity production and supply, which, he notes, will bolster energy security and lower energy costs for citizens.

Skrekas also questions how PPC will implement its investment plan to ensure a firm level of competitiveness and long-term sustainability.


Energy minister fares soundly in local MRB popularity poll

Energy Minister Panos Skourletis, who was appointed following the Syriza-led coalition’s re-election last September, was ranked the government’s sixth most popular minister by a sample of the electorate and second most popular minister by Syriza-party backers, the results of a new poll conducted by local research company MRB have shown.

On the contrary, the energy minister’s deputy, Yiannis Tsironis, fared poorly to rank close to the bottom, both among the electorate’s sample and voters who picked the Syriza party at last September’s elections.

Interestingly, finance minister Euclid Tsakalotos, who holds one of the government’s toughest portfolios amid the recession, ranked as the most popular minister, both among electrorate representatives and Syriza supporters.

Visiting French delegation scanning wider business interests

The series of Greek-French business meetings being staged as part of French President Francois Hollande’s two-day visit to Athens, concluding today, concerns interests primarily in the industrial, energy, construction, and infrastructure sectors. Hollande is heading a delegation that includes French entrepreneurs seeking to invest in Greece and also form partnerships with local businessmen for ventures both in Greece and elsewhere. However, the French team is smaller than had been expected.

Leading business federations of both countries, as well as enterprises, are engaged in talks. SEV, the Hellenic Association of Industrialists, had begun proceedings with a visit to Paris late last month by its president Theodoros Fessas and Greek businessmen from the trading, industrial, services, and technology sectors.

French entrepreneurs are also scheduled to meet with Greek officials representing the energy, environment, technology and construction sectors at an event organized by the French Embassy.

French investors are believed to be interested in the energy sector with a focus on the electricity market, renewable energy, as well as hydrocarbons exploration. EdF and Total are being represented by high-ranked officials on this trip.

Infrastructure and major projects are also generating the interest of companies such as Vinci and France’s state-run railway company SNFC, which appears to be interested in TRAINOSE, Greece’s railway company.

As for the environment sector, Suez Environment, which already holds stakes in EYDAP, the Athens Water Supply and Sewage Company, and EYATH, the Thessaloniki Water Company, seems interested in expanding its association, even if privatization plans do not proceed. Waste management investment opportunities are also being examined.

Other fields being looked at include logistics, the land registry, tourism, defense, and pharmaceuticals.

Greek-French entrepreneur Pâris Mouratoglou, a former chief at EdF Energies Nouvelles who now heads his own enterprise, EREN, a group developing natural resource efficiency worldwide, including in Greece, is also part of the French delegation visiting Greece.

These Greek-French meetings carry a mostly political dimension aiming to highlight the positive shape of bilateral relations. It remains to be seen whether this favorable political momentum can be transformed into business deals in the near future. More business missions are planned for later this year.

Energy Ministry’s secretary general resigns from post

The energy ministry’s Secretary General Apostolos Alexopoulos resigned from his post last Friday for reasons that currently remain unknown, energypress sources have informed.

It is suspected Alexopoulos’s departure may be linked to his diminished role in major energy ministry issues following the re-election of Panos Skourletis at the ministry’s helm.

Alexopoulos, a former Syriza MP, had assumed the energy ministry’s secretary general post immediately following the party’s first election victory, last January.

He served under the then-energy minister Panagiotis Lafazanis, a radical leftist who eventually quit Syriza to form his own anti-eurozone party, Popular Unity, ahead of last month’s snap elections. It failed to reach the three percent electoral threshold in order to be represented in Parliament.

IPTO sale avoided by alternative measures, Tsipras argues

The Syriza party leader Alexis Tsipras, speaking at last night’s debate ahead of this Sunday’s Greek elections, defended his recent decision to sign Greece’s latest bailout agreement, noting, among other things, that his government managed to not buckle under the pressure of creditors on demands concerning the main power utility PPC and IPTO, the power grid operator.

Asked why he wanted to head the next government in order to implement a bailout agreement that may not be negotiable, Tsipras responded by contending the deal remains an interactive process that is subject to further discussion on several significant issues kept open by his government.

The Syriza leader cited his party’s debt reduction effort, privatization fund terms, labor laws, non-performing loans and protection of property owners, as well as the struggle to maintain state control of PPC and IPTO, as matters all still being negotiated.

Elaborating on IPTO, locally acronymed ADMIE, Tsipras stressed that solutions offsetting the need to privatize the power grid operator could be found. He was challenged on the matter by main opposition New Democarcy party leader Vaggelis Meimarakis.

Tsipras said voters will need to choose whether they want a government that is prepared to battle for better bailout terms or a submissive one that will offer no resistance to creditor demands.

Ioannis Golias named energy minister in interim government

Ioannis Golias, a former Dean at the National Technical University of Athens, has been appointed Production Reconstruction, Environment and Energy Minister in Greece’s new interim government.

The ruling Syriza party resigned recently and called early elections, to take place on September 20, in search of a fresh four-year mandate.

Speaking at today’s handover ceremony, the new energy minister said he hoped his tenure will be a brief one. “We are here to ensure that the country heads towards elections smoothly,” Golias remarked.

His outgoing predecessor, Panos Skourletis – who had only recently been appointed energy minister in place of radical leftist Panagiotis Lafazanis, now at the helm of his newly launched anti-bailout and eurozone membership Popular Unity party – quipped that he hoped the interim minister’s tenure would be even shorter than his own.

Skourletis made note of pending issues at the energy ministry, such as final negotiations for the TAP (Trans-Adriatic Pipeline) project’s development, as well as an additional Greek-Russian pipeline being discussed.

Kostis Mousouroulis was appointed deputy minister, in charge of the environment portfolio, in place of Yiannis Tsironis.

Top energy officials join PM, minister for Russia mission

The top officials of the state’s energy apparatus have joined Prime Minister Alexis Tsipras and the Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis for an official visit to St Petersburg, during which the duo will meet with Russia’s President Vladimir Putin tomorrow and is expected to make official Greece’s interest in developing “Greek Stream”, the local segment of “Turkish Stream”, Russia’s latest natural gas pipeline proposal for supply to the EU via the south, from the Greek-Turkish border area.

The inclusion to the Greek delegation of the energy-sector company chiefs – main power utility PPC’s Manolis Panagiotakis; DEPA, the Public Gas Corporation’s Spyros Paleogiannis; and ELPE Hellenic Petroleum’s Grigoris Stergioulis – has obviously prompted curiosity over the purpose of their participation. It is believed they have joined the mission to develop ties leading to cooperation with members of the BRICS association of emerging economies – Brazil, Russia, India, China, and South Africa.

The Greek energy officials are expected to engage in talks with BRICS representatives on the sidelines of the St Petersburg International Economic Forum (SPIEF – 2015), to be held today.

As for the Greek government’s ambitious bilateral maneuverings with Russia, certain pundits have already limited their expectations of any meaningful and significant results. Such ties cannot be forged in minimal time for results of substance, and, most crucially, the European Commission has already expressed its disapproval of Greece’s effort to develop closer ties with Russia, the skeptical pundits contend.

Essentially speaking, the series of talks by Greek officials in St Petersburg, to culminate with that of tomorrow’s meeting between Tsipras and Putin, amount to no more than a game of diplomatic poker. The key message being conveyed is that Tsipras is in Russia to sign bilateral energy agreements of cooperation with the Russians at a time when Greece’s debt and bailout issues are the focus of attention in Brussels and Berlin.

Besides the Greek Stream pipeline project, it seems that the Greek government is also seeking to include various other issues as part of a wider energy agreement, such as LNG, crude oil supply, the expiring hydrocarbons tender for offshore blocks in the Ionian Sea and south of Crete, as well as the electricity market. The five-member BRICS association includes three petrol-producing countries, Brazil, Russia, and South Africa.

Russia’s Turkish Stream proposal seems to have already run into trouble. Turkey, the Former Yugoslav Republic of Macedonia (Fyrom), and Serbia, countries through which the pipeline would cross, appear doubtful, to add to the European Commission’s reserved stance, despite the fact that nobody doubts the pipeline would be a useful addition to EU energy supply.


Greek energy policy headed for closer ties with Russia

Greece appears headed towards seeking closer energy-related ties with Russia, if early comments delivered by the new Syriza-led coalition government’s Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis – head of the leftist party’s wing of euro sceptics, dubbed the Left Platform – may serve as an indicator.

During yesterday’s ministry handover procedures, Lafazanis, in his comments, made clear the newly appointed Greek government’s intention to strive for closer ties with Russia as part of the country’s revised energy policy.

Also hinting at such a development, the Syriza-led government has already voiced strong objections to new EU plans for further sanctions on Russia over Ukraine. Commenting on the issue, newly appointed Finance Minister Yiannis Varoufakis noted that Greece – both previous and new governments – was never asked about the Russia sanctions, describing the development as a “question of respect for our national sovereignty”.

Although the new government’s overall plans remain unclear following last Sunday’s snap elections, other officials at the new Production Reconstruction, Environment and Energy Ministry have already noted that an effort will be made for a change of course on Greece’s energy-sector matters.

The country’s new political leadership already appears eager to engage Greece in Russia’s new plans for the establishment of a gas hub along Greek-Turkish borders, following the apparent debacle of South Stream.

One official told energypress that the newly elected Greek government will promote the idea of establishing Greek territory as a transit zone for Russian plans to transmit natural gas to Turkey as part of a route to then head for Europe. Also, the official noted that a thought of incorporating the TAP (Trans Adriatic Pipeline) route, already under construction, into this network, was also being contemplated. In such a case, the TAP pipeline would carry both Azeri and Russian natural gas to Europe.

However, it should be pointed out that, for the time being, these plans remain highly theoretical. No official requests have been forwarded to either the TAP consortium or, more importantly, the European Commission. The EU executive body has already offered its approval to the current TAP plan, to carry Azeri natural gas to Europe, as a project that will contribute to Europe’s reduced energy dependence on Russia.

The underlying objective of the plan to possibly utilize the TAP pipeline for Russian gas as well would be for Greece to request a further reduction on gas prices from Gazprom, which would then be passed on to Greek households and industry.


Syriza ‘Left Platform’ member tipped for ministry overlooking energy

Panayiotis Lafazanis, part of the newly elected Syriza-led government’s firmer left wing, or Left Platform, has been touted as the likeliest choice to head a new enlarged ministry to incorporate the energy sector, according to latest information.

The new “super” ministry’s role of deputy minister, expected to take on environmental affairs, and, possibly, energy as well, is being tipped to bring in Yiannis Tsironis of the Democtratic Left (DIMAR) – Greens cooperation, members of which were added to the coalition government earlier today in a surprise move by new prime minister Alexis Tsipras.


Energy projects valued at 5bn euros stranded by politics

A series of major energy-sector projects worth an estimated five billion euros have been caught amid the crossfire of contrasting political outlooks in the run-up to the country’s early general elections. At this stage, it seems that, at best, a number of revisions will need to be made to various plans following the elections.

The TAP (Trans Adriatic Pipeline) infrastructure project to carry natural gas from Azerbaijan to Europe, via Greece, Albania, and the Adriatic Sea, is a stand-out example of the political impact on the country’s energy-sector plans. The main opposition leftist Syriza party, ahead in polls, has not endorsed the plan, and promises to strive for a number of revisions. The party has already declared it intends to renegotiate the agreement, possibly for increased participtation by the Greek state in a consortium formed to develop the gas pipeline, as well as greater royalty payments. These intentions, alone, create an entirely new context for the project, whose budget is valued at 1.5 billion euros.

Also, the long-delayed 400 million-euro DESFA privatization, now being examined by the European Commission as a result of its concerns over the Azeri company Socar’s move into the EU market, through a 66 percent acquisition of DESFA, is another issue likely to change course following the upcoming Greek elections.

It was recently reported that a Syriza delegation’s trip to Azerbaijan for talks with local government officials on various issues, including the DESFA deal, prompted Azeri officials to accept maintenance of the network’s control by the Greek State.

The planned privatization of PPC (Public Power Corporation) subsidiary firm IPTO, the Independent Power Transmission Operator, through a 66 percent sale of its equity share for between 600 million and 900 million euros, is another deal that would probably stop rolling with Syriza at the country’s political helm. Furthermore, the part-privatization of PPC, through the sale of a 30 percent share of the corporation for an estimated 1.5 billion euros, as well as the planned sale of a 17 stake in PPC to a strategic investor, can both also be expected to be stalled by a new Syriza government.

The picture is also hazy for the propsects of two hydrocarbon exploration international tenders currently in progress. Syriza has voiced clear objections to the model implemented. Local politics aside, the sector now also finds itself under dark clouds as a result of plummeting crude oil prices over recent months in the international market, which has forced companies to cut back on investment plans.


Poll frontrunner, leftist Syriza, promises changes in energy

Syriza, the main opposition, left-wing party that has radically opposed the government across the board and is ahead in polls, is making final adjustments to its energy policy. However, although now less than two weeks away from the snap elections, the party’s energy agenda still lacks specifics and priorities. Syriza officials have assured that the party’s energy agenda will acquire further detail over the next few days.

In the run-up to the elections, Syriza has clearly stated it regards the energy sector as a matter of public and social interests, while adding that the country will need to make investments to achieve restructured productivity and enter a new era in the battle against climate change through the development of new energy-related technology.

Syriza, in a rundown of its energy agenda obtained by energypress, stresses that it intends to alter the country’s role in the international market as a mere buyer, or consumer, of advanced technology, and, instead, utilize domestic research potential currently either sitting idle or being brain-drained out of Greece for better prospects elsewhere.

These are the main reasons why public companies need to exist and control power and gas matters, while current free-market revisions taking place at a European level in the energy sector aim to fully commercialize the sector, Syriza noted. The party clearly does not agree with the course being taken.

As for hydrocarbon exploration, Syriza noted that international experience has proven the need for systematic research over extended periods, even decades, before real results can emerge. The leftist party criticized the conservative New Democracy party-led coalition of using the country’s hydrocarbon prospects as a mere communicative tool for interests of political expediency.

On energy-sector privatizations worked on by the coalition, the Syriza party stated that state-controlled companies are indispensible tools for energy policy and production. Subsequently, the series of attempted privatizations will need to be cancelled, while productive restructuring will be a necessary step, the party noted.

The party’s plan for PPC, Syriza noted, entails unifying all its subsidiary firms, restructuring, investment in the upgrading of facilities and environmental concerns. Syriza will reduce the cost of electricity by utilizing local sources and eliminating indirect costs such as taxes and surcharges that make up 70 percent of electricity price levels being charged, the party stated.


Energy sector’s future standing awaits election result

Most of the country’s energy sector issues and developments stand awaiting the result of the upcoming early national elections on January 25, which makes any predictions for the industry extremely precarious.

Victory and majority rule for left-wing Syriza, the main opposition party currently ahead in polls, will lead to radical changes and upheavals. Should its main rival, the conservative New Democracy party, defy the polls and score an election victory, rapid progress can be expected along a number of fronts, especially privatizations. Either way, both parties may fail to achieve an outright majority, meaning they would need to serve as  senior partners of coalition governments, which would dilute their political potency.

Pending privatization procedures and the liberalization of the country’s electricity and gas markets can be expected to be completed in the case of victory for New Democracy, which led the outgoing coalition. The  crucial question concerns Syriza’s intentions, even though the party has more or less stated how it intends to handle energy sector issues if elected to govern.

Amid a stable political environment, the privatization of IPTO, the Independent Power Transmission Operator, would have been completed within the first few months of 2015. Syriza has voiced strong opposition to the sale of a 66 percent equity share of the operator, a subsidiary firm of PPC, the Public Power Corporation. Despite being at its closing stages, the tender cannot be expected to be finalized under a Syriza government. The same applies for a planned 17 percent sale of PPC following the IPTO privatization.

As for the privatization of DESFA, the Natural Gas Transmission System Operator, with Azeri company Socar as the buyer, it had reached its final stage but was stalled and delayed by the European Commission for an examination over EU energy security concerns. A Syriza government would complicate proceedings here, too.

The planned liberalization of the gas and electricity markets would be subject to a series of amendments if Syriza prevails to govern either independently or as the senior partner of a coalition. The gas market’s liberalization was at an advanced stage prior to the government’s fall. The liberalization of the electricity market through a series of revisions, such as NOME-type auctions, was also in the making before snap elections were called.

According to Syriza’s planned policies for the energy sector, the role of state-controlled companies will be bolstered, which also raises questions about the future standing of ELPE (Hellenic Petroleum). The public sector may not have majority control of ELPE, but it does hold a considerable stake.

As for the development of natural gas pipeline infrastructure, no major changes are expected here, regardless of the election’s outcome, because the shape of most projects has been pre-determined. However, Syriza has left open the possibility of attempting to reach a new agreement for the TAP (Trans Adriatic Pipeline) project, citing the State’s level of interest, and its corporate inclusion as a consortium partner. It remains unclear whether this is legally feasible.

Syriza has not voiced objections to the interconnection of the Cyclades with the mainland grid or the development of an underground natural gas storage facility in Kavala, northern Greece.

The recent plunge in international oil prices, alone, has lowered the expectations for the country’s oil exploration and exploitation tenders. Market trends aside, Syriza has forwarded a revised model that makes the State a consortium partner at both the exploration and exploitation stages. Tenders currently in progress are based on lease-agreement models, which stipulate specific taxation, royalty payments and other obligations for companies involved. Syriza is promoting a model based on production sharing agreements, which would offer the Greek State rights in research, development, and production.

Energy Ministry’s general secretary aims for IEA top post

Konstantinos Mathioudakis, who has served as General Secretary at the Environment, Energy & Climate Change Ministry since 2009, will be a candidate for the Executive Director’s position at the International Energy Agency.

The IEA, an independent organization which works to ensure reliable, affordable and clean energy for its 29 members and beyond, focuses its efforts on energy security, economic development, and environmental awareness. It was founded in response to the oil crisis in 1973-74 as a means of helping countries coordinate a collective response to major distruptions in oil supply.

Mathioudakis’s candidacy for the position, whose role has broad political, analytical, and operational responsibilities, will be backed by the Greek government. Successful lobbying will be required if the Greek official is to be recruited for the IEA’s top post as a number of other member states will also be promoting candidates of their own for the job.

If successful, Mathioudakis will succeed Dutch official Maria van der Hoeven, who has led the IEA since 2011.

Mathioudakis is a professor at the National Technical University’s (NTUA) Faculty of Mechanical Engineering. He holds a post-graduate degree gained at Belgium’s Von Karman Institute for Fluid Dynamics in 1981, as well as a Phd from the country’s Catholic University of Leuven, four years later.


All energy sector matters suspended awaiting elections

With Greek Parliament set to be dissolved today ahead of early elections on January 25, numerous energy sector issues will be left pending over the short pre-election campaign. Some of these will possibly begin to roll once a new government is sworn in, regardless of the outcome at the polls. On the contrary, other matters may well be cancelled or shelved for lengthy periods.

One thing for certain is that all privatization procedures will temporarily stop moving, beginning with that of IPTO, the Independent Power Transmission Operator, which was at its closing stage, as binding offers were set to be submitted by candidates before the country’s political uncertainty set in. If Syriza, the left-wing main opposition party is elected to govern, either alone or as the main partner of a coalition, IPTO’s privatization prospects are expected to be deeply affected.

This is also the case for the part-privatization of PPC, the Public Power Corporation, entailing the sale of a 30 percent stake, followed by a further sale of a 17 percent equity share in the corporation, as well as the sales of DEPA (Public Gas Corporation), and the state’s 35 percent stake in ELPE (Hellenic Petroleum). The long-delayed sale of a 66 percent equity share of DESFA (Natural Gas Transmission System Operator) to Azeri company Socar, currently being examined by the European Commission over EU energy competition and security concerns, may stop short of offering the prospective buyer majority control.

Just days ago, two Syriza MPs, Thanassis Petrakos and Aphrodite Stambouli, declared that the country’s energy security concerns require a strong, state-controlled energy sector for utilities of strategic public importance.

The outgoing coalition’s plan to liberalize the country’s gas market, fully prepared after much work, can also be expected to be deeply affected by the political turmoil. It remains to be seen if this plan will be pursued by the next government. This is likely, possibly in a revised form, as the gas market’s liberalization is an EU obligation.

Also suspended, for the time being at least, are revisions enabling flat owners in apartment buildings to switch from heating fuel to independent gas heating systems. The transfer of a  responsibility for collecting electricity bill surcharges to fund renewable energy source (RES) producers from IPTO to LAGIE, the Electricity Market Operator, will also be put on hold. Both these revisions had been incorporated into the gas market reforms bill. However, RES producers were exempted from an Emission Reduction Tariff (ETMEAR) for self-produced electricity through an amendment ratified in Parliament just prior to Christmas, setting in motion a net metering plan for self-producers. A ministerial decision still needs to be signed if the net metering plan is to be launched. It will enable electricity consumers who generate their own power from an eligible on-site facility and deliver it to local distribution facilities to offset the electric energy provided by the utility during an applicable billing period.

The coalition’s work for the introduction of NOME-type auctions in the electricity market, which involved challenging negotiations with the country’s creditor representatives, or troika, can also be considered an ill-fated effort, at least for now. Legislative amendments still need to be made if the electricity auctions are to begin being staged in the Greek market.

On the contrary, revisions to the country’s capacity availability mechanism do not require amendments or ministerial approval. This domain is controlled by RAE, the Regulatory Authority for Energy, meaning that approval by its board is the only prerequisite. However, the plan, which would lead to changes for the market’s CATs (Capacity Availability Tickets), still needs to be forwarded for public consultation. Despite an agreement by the coalition with the troika on the capacity availability mechanism, the political situation will need to be cleared up before further progress can be made.

Smooth sailing for the TAP (Trans Adriatic Pipeline) project, to carry natural gas from Azerbaijan to Europe, via Greece, Albania, and the Adriatic Sea, is also currently in doubt. The Syriza party has repeatedly noted that the Greek State’s agreement with the project’s consortium provides too much authority to the consortium, and, as a result, will be renegotiated if the party is elected into power. Even though party officials admit that the feasibility of such a prospect is not legally definite, the intention alone does create some uncertainty for a project of strategic importance to national interests.


Greek role pivotal for EU energy security, PM stresses

Europe’s energy security and Greece’s pivotal role in the diversification of the continent’s energy supply were addressed by Greek Prime Minister Antonis Samaras during his speech at the two-day Asia-Europe Summit Meeting (ASEM) in Rome.

According to government sources, Samaras stressed that establishing alternative energy sources stands as a crucial part of Europe’s effort to achieve energy security.

The Greek Prime Minister underlined that, as part of this effort, Greece has undertaken a pivotal role through its involvement in the development of the Southern Gas Corridor, to link the Caspian region with Europe’s energy market. The Greek Samaras described this effort as a long-term vision, noting that the country was not only engaged in developing pipeline infrastructure but building bridges of cooperation.

During his speech, the Greek leader also made note of the country’s hydrocarbon exploration initiatives and the imminent international tender for exploration and exploitation of blocks in the Ionian Sea, western Greece, and south of Crete.

Samaras described the association between Europe and Asia as not just being about commerce and economics. He highlighted the enormous cultural heritage of both continents and the importance of increased ties through academic cooperation and tourism.

The Asia-Europe Summit Meeting, held under the theme “Responsible Partnership for Sustainable Growth and Security”, concludes later today.

Main opposition MP attacks coalition on all energy fronts

The head official on energy matters at Syriza, the leftist main opposition party, unleashed a relentless attack against the coalition government’s energy policies, on all fronts, in Parliament yesterday.

Increased electricity bills charged by PPC, the Public Power Corporation, plans for its part-privatization, as well as the promotion of private-sector interests were among the aspersions cast by the Syriza official, Thanassis Petrakos, an MP representing Messinia, in Greece’s southwest.

During his address in Parliament, delivered as part of a three-day vote of confidence debate for the coalition, Petrakos condemned the coalition of having worsened an already extremely expensive electricity supply system created by “your previous governments”, referring to the coalition’s conservative New Democracy and socio-democratic PASOK parties. The Syriza party MP argued that this had led to an electricity cost increase of 103 percent for households and 76 percent for businesses over the past 12-year period.

As a result, power supply had been cut off for 312,343 households in Greece throughout 2013, according to figures provided by HEDNO, the Hellenic Electricity Distribution Network Operator – locally referred to as DEDDIE – Petrakos remarked. The Syriza MP noted that consumers were spared of power disconnections only one week ahead of the European Parliament elections, as a pre-elections period favor.

The amount of unpaid electricity bills had reached 1.8 billlion euros, while thousands of poverty-stricken households were unable to pay their electricity bills, including readjusted terms for these, Petrakos told Parliament.

Syriza’s head official for energy matters also asserted that PPC, the Public Power Privatization, was headed towards part-privatization to serve the interests of energy-sector entrepreneurs.

Petrakos condemned the coalition for selling out on the country’s natural gas interests, referring to the imminent privatization of DESFA, the Natural Gas Transmission System Operator.

He also accused the coalition of leading thousands of small-scale photovoltaic producers to despair. They were promised plenty but were eventually devastated, he contended, while noting that large-scale PV producers had been protected.


Leftist Syriza seeks to appease business community fears

A delegation of key officials at Syriza, the main opposition leftist party that has adamantly attacked many of the coalition’s policies, including privatizations in the energy sector, has met with all the Greek energy sector’s main corporate players, domestic and foreign, as well as foreign fund representatives, over the past year, at least, according to confirmed reports, as part of an overall effort to appease the business community’s concerns if the party is elected to power.

Besides constituting an effort by the Syriza party to appease anxiety in the business community over an abandonment of national investment plans and agreements, the meetings have also offered corporate leaders an opportunity to exchange views with key members of the political party anticipated to eventually govern the country.

Nowadays ahead by several percentage points in various polls after traditionally just making the three-percent cut for a place in Parliament, Syriza has vehemently opposed the coalition’s privatization plans, public sector job cuts, and even questioned Greece’s place in the euro zone. The country could face early elections next spring if Greek Parliament’s political parties fail to agree on a new President, a development that would topple the government, despite this being a ceremonial post.

Although Syriza officials have mostly maintained their guard on the party’s intended policies, sticking to the safety of diplomatic language, the party appears to have softened up on previously radical views.

Syriza is believed to have committed to not taking any rash action that would endanger the country’s place in the euro zone and lead to further havoc in Greece. Also, any privatizations already completed will not be altered, party officials have supported at these meetings. Based on hints stemming from within Syriza’s ranks, it is believed that the party’s hard line on state control in areas such as banking, energy, and water, is also transforming. State control combined with private management has apparently been suggested as an option the party could adopt.

Syriza officials, however, are adamant about their views on a change of economic policy that would end austerity measures and instead focus on seeking ways to stimulate market activity without causing new deficit problems.




Coalition leaders to hold final meeting ahead of Paris talks

A meeting between Prime Minister Antonis Samaras and Deputy Premier Evangelos Venizelos on Wednesday evening is expected to result in the government settling on its negotiating strategy for the talks coalition representatives are due to hold with the troika in Paris at the beginning of September.

The meeting, due to begin at 6 p.m., is the second the coalition leaders are holding this week as the government gears up for the September 2 rendezvous in Paris. They will be joined by Finance Ministry officials, as well as Development Minister Nikos Dendias, Labor Minister Yiannis Vroutsis, Justice Minister Haralambos Athanasiou, Deputy Administrative Reform Minister Evi Christofilopoulou and State Minister Dimitris Stamatis.

The government officials will look at all the loose ends remaining ahead of the troika’s expected return to Athens in mid-September while also finalizing Greece’s main goals for the Paris meeting. The Greek side hopes to emerge from the discussion with a commitment from the troika regarding the moves that will follow the conclusion of the fifth review of the country’s adjustment program, particularly with regard to further debt relief and whether Greece’s lenders will insist on a third bailout package.

However, the troika will also want to see signs that Greece is set to meet structural reform targets. These include speeding up the pace at which justice is delivered. It is estimated that there are some 400,000 cases currently outstanding at Greek courts, 100,000 of which are related to tax matters.

Also, Greece has to fire another 6,500 civil servants by the end of the year. However, Administrative Reform Minister Kyriakos Mitsotakis is facing resistance on this issue, particularly from coalition partner PASOK.

The Socialists are also opposed to the changes to labor regulations being demanded by the troika, including the right for employers to refuse employees the right to work during a labor dispute, also known as a lockout.

Sea plots tender may coincide with heated political landscape

The much-discussed international tender offering exploration and exploitation rights for twenty sea plots in the wider Ionian Sea area and south of Crete, expected to be published in the Official Journal of the European Union within the second half of September, could coincide with a heated domestic political landscape that could even result in early national elections.

Interested parties will face a six-month deadline to submit their bids from the date of the tender’s publication, meaning that winning bidders can be expected to have been determined by the end of March, 2015, if the schedule is maintained as planned.

Looking ahead to next March, the tender results may emerge amid a period of political instability in Greece as the country’s political parties battle over the next presidential candidate.

The second and final five-year term of current president, Karolos Papoulias, ends next March. In the lead-up, the country’s political parties will be maneuvering to agree on a candidate for the incumbent’s replacement for Greece’s presidency, a ceremonial position. However, failure to do so would prematurely end the coalition’s tenure.

It is no secret that the prospect of early elections, and the political uncertainty this entails, could prove detrimental for investments in Greece. Local politicians are currently concerned that the fear of political instability could deter major firms from taking part in the international tender for hydrocarbon exploration.

Domestic political issues aside, Greek officials are even more concerned about the worrying developments on the international geopolitical landscape. The ongoing conflict in Ukraine is intensifying and an energy crisis that would be prompted by a Russian disruption of natural gas supply to Europe does not appear unlikely for next autumn or winter.

Despite the dangers posed by such a prospect, some pundits argue that an energy crisis could ultimately intensify exploration activity for the discovery of new natural gas sources in the eastern Mediterranean, which would also draw greater attention to Greece’s energy prospects.

The ongoing crisis in various parts of the Middle East stands as an additional concern that does not provide stability for investments.

Greek officials are remaining reserved about the type of companies that could be drawn to the upcoming tender for hydrocarbon exploration. Officials would be content to attract mid-sized yet robust firms, as well as rising newcomers, to the tender. It remains to be seen whether major players such as Exxon, Chevron, Total, Anadarko, Noble, Enel, and BP, which have all held meetings with Greek energy officials, will take their interest a step further.

A new round of presentations has been planned for autumn, both in Greece and abroad, following a show in London earlier this summer, in June.

Avramopoulos in US for talks with Hagel on possible Greek role in peace missions

Defense Minister Dimitris Avramopoulos arrived in Washington early on Thursday for an official visit following an invitation by his US counterpart Chuck Hagel.

The two men were to meet later in the day for talks that were expected to focus on the possible participation of Greek armed forces in American-led peace missions in view of Greece’s stated intent to play a key role in contributing to stability in the broader region.

The talks come at a critical moment in the wake of the beheading of American journalist James Foley by an Islamic State (ISIS) militant, with the US seeking the support of allies in tackling volatile situations in Iraq and Syria.

Simonov: Middlemen, taxes inflating natural gas prices

Natural gas price levels in Greece were being inflated by taxes imposed, as well as commission earnings of middlemen, the general director of Russia’s National Energy Security Fund, Mr. Konstantin Simonov, has noted in an interview with Greek daily Kathimerini.

The high-ranked official, who spoke at length on the geopolitical matters being played out parallel to the ongoing conflict in Ukraine, also acknowledged that Russia’s pricing policy could be more lenient for a country such as Greece.

“I’m not supporting that the Russian policy is absolutely correct. We should be more flexible in matters concerning pricing policy,” the Russian official noted, while adding that his country could offer “even greater discounts, especially in southeast European countries, as Brussels considers that Russia is operating in a monopolistic fashion in this region.”

The remarks come as a stark contrast to Moscow’s customary firm stance on natural gas price levels.

It should be noted, however, that renegotiation procedures between Russia and Greece were completed earlier this year after the Russian Prime Minister, Mr. Dmitry Medvedev, remarked, in comments made almost one year ago, that the price of natural gas in Greece was 30% over the European average.

Mr. Simonov’s latest comments raise questions about the persistence of higher natural gas prices in Greece compared to other European nations.

Besides households, the high cost of energy has also developed into a crucial matter for Greek industry. A sharp decline in exports has alarmed both government and business officials. Greece’s Prime Minister, Mr. Antonis Samaras, was scheduled to hold a meeting today with the president of the Hellenic Association of Industrialists (SEV), Mr. Theodoros Fessas, and other ministers. The SEV chief, sources said, planned to appeal for lower energy costs for industry at the meeting.

PM, Venizelos meet as Administrative Reform Ministry eases stance on evaluation

Coalition leaders sought on Thursday to defuse tension that has built up between New Democracy and PASOK as a result of the assessment of public servants’ performance, with the Administrative Reform Ministry indicating that it is willing to make compromises over the evaluation scheme.

Prime Minister Antonis Samaras and Deputy Premier Evangelos Venizelos met on Thursday to discuss the dispute between the two parties. Although there were no public statements directly after the meeting, both sides let it be known that the two leaders are determined to overcome this rift and to meet Greece’s commitments to the troika.

In a statement issued later to mark the 40th anniversary of the junta’s fall and democracy being restored to Greece, Samaras appeared upbeat. “I am optimistic about tomorrow,” he said. “This feeling is not based on guesswork.”

Venizelos also denied that PASOK was wavering over its commitment to Greece’s adjustment program. He said the Socialist party had shown over the past few years that it is prepared to take the decisions needed to help the country exit the crisis.

In a further bid to dispel doubt about the government’s future, Samaras also told New Democracy MPs in an off-the-record meeting that he believes Greece will not be forced to hold snap elections early next year. According to sources, the prime minister told the lawmakers he believes the government will get the 180 votes it needs in Parliament to elect a successor to President Karolos Papoulias when the head of state’s term expires in February.

The conciliatory mood within the government was also aided by Deputy Administrative Reform Minister Evi Christofilopoulou revealing that tweaks will be made to the evaluation process in the civil service. The point of friction between the two governing parties has been Administrative Reform Minister Kyriakos Mitsotakis’s insistence that 15 percent of employees in each department be deemed below standard, leading to them being placed in a labor pool.

Christofilopoulou indicated that the ministry is now willing to commit in writing that civil servants who fail the grade will not be fired, transferred or have their wages cut. Instead, the government will seek ways to increase their productivity, such as extra training. “The aim of the evaluation is only to improve the performance of civil servants,” she said.