Greek Government Amendments on DESFA Deal «Unprecedented»

The amendment made by Greek energy ministry that severely reduces DESFA’s leeway for network usage hikes and, by extension, the operator’s revenue potential, is an “unprecedented” move, Azerbaijan’s ambassador to Greece Rahman Mustafayev said in an interview to Greek weekly To Vima.

But he noted that even so, SOCAR remains interested in the DESFA deal, adding that he hopes the privatization can be swiftly completed.

“The operator’s market value has been reduced and the risk level has increased, which is why we expect specific moves from the Greek side in order to cover the damages caused,” Mustafayev said.

On Monday, president of SOCAR Rovnag Abdullayev told reporters that SOCAR is not going to abandon the purchase of a share in the Greek gas operator DESFA.

“We won the tender and we’re not going to abandon the deal [with DESFA],” Abdullayev said. “We don’t talk about appealing to a court, but we will defend our interests till the end. The originally negotiated rules have been violated. We are now waiting for justification from the government of Greece. Under the new rules, DESFA’s value should be twice cheaper, so we are in talks with the Greek government.”

SOCAR won a tender in 2013 on the purchase of a 66-percent stake in DESFA for 400 million euros.

Earlier, Azerbaijan's Energy Minister Natig Aliyev said that the deal on SOCAR's purchasing the 66-percent share in Greece's DESFA will be completed after Italy's Snam purchases 17 percent of that share. Regarding Italy’s Snam, the company, just like SOCAR, is in talks with the Greek government regarding the situation, Abdullayev said.

In July 2016, Greek Minister of Environment, Energy and Climate Change Panos Skourletis accused the European Commission of delaying the deal on selling a share in Greece's DESFA to SOCAR. Skourletis said that a number of conditions, set by the European Commission, greatly slowed the privatization process of the gas operator.

In particular, the company will become a passive shareholder, not entitled to vote in the management of the company, as a result of decreasing SOCAR’s share in DESFA up to 49 percent.

Greek MPs stressed that the problems with the privatization of DESFA may deprive the country’s economy of SOCAR’s huge capital injections. –0--