eKathimerini — Energy Minister Panos Skourletis appeared on Monday in Parliament to take for granted the failure of the privatization of natural gas transmission network operator DESFA.
Skourletis went as far as to accuse the European Commission for scuppering the deal, saying that Brussels not only forced Azeri buyer SOCAR to slash its prospective stake from 66 percent to 49 percent but also reduced it to a passive shareholder, without a say in the operator’s management.
Skourletis responded to accusations from the opposition that he was responsible for torpedoing the deal, saying that the agreement had failed before he took over at the ministry, and even claimed that its constituted a “major scandal.”
Opposition MPs argued that the minister is responsible for depriving the economy of 400 million euros – the price of the transaction – and of 10 billion euros in future investments by the Azeri firm SOCAR.
SOCAR agreed in 2013 to buy a 66% stake in the crisis-hit country’s natural gas grid operator DESFA for €400 million. But the acquisition has not been concluded, as SOCAR must divest 17% of DESFA to a third party to address EU anti-trust concerns.
In November 2014 the Commission opened an in-depth investigation to determine whether the acquisition of DESFA SOCAR is in line with the EU Merger Regulation. The EU executive is reviewing the deal, because Azerbaijan is to become both a major gas supplier to Greece, and also a majority owner of the gas operator.
Azerbaijan’s perspective, is that there is no conflict of interest in acquiring the majority stake in SOCAR, because the owner of the gas to be pumped through SGC was not Azerbaijan, but the consortium of the Shah Deniz II gas field, from where it originates. The Shah Deniz field is operated by BP, which has a share of 28.8%. Other partners include Turkey’s TPAO (19%), SOCAR (16.6%), Brazil’s Petronas (15.5%), Russia’s LukOil (10%) and Iran’s NIOC (10%).
Athens is examining an option under which SOCAR would divest at least 17% either to the Greek government, or a third entity, to address the EU’s concerns.
The Chief Executive of SOCAR Energy Greece, Anar Mammadov, met Energy Minister Panos Skourletis last Tuesday to discuss the issue. Mammadov warned after the meeting that enacting the bill would put the deal at risk.
“If implemented, those changes would reduce the value of the company and its future profitability dramatically,” Mammadov told Greek news website capital.gr.
He said SOCAR would decide how to proceed after a parliamentary vote on the bill expected later this week.
“The only thing I can say right now is that I can’t see how the tender could be salvaged if those changes are implemented as planned,” he said.
The sale of DESFA, part of a privatisation scheme mandated by Greece’s international lenders, is expected to raise €188 million for state coffers this year and help the country meet a €2.5 billion bailout target from state asset sales proceeds.