SOCAR keeps DESFA’s purchase high on agenda

By: Gulgiz Dadashova

Azerbaijan’s energy giant SOCAR seems to be ready for compromise in purchasing a 66-percent share in Greek DESFA gas transportation system operator.

Greek media reports that DESFA’s purchase was mulled at a meeting of the head of the Greek Regulatory Authority for Energy (RAE) Nikolaos Boulaxis with Azerbaijani Ambassador to Athens Rahman Mustafayev and Head of SOCAR Greece Anar Mammadov.

SOCAR agreed to pay 400 million euros to buy a 66 percent stake in DESFA in the summer of 2013. The agreement to sell a majority stake in DESFA to the Azerbaijani company was stalled by a European Commission investigation in late 2014 over EU competition and energy security concerns.

Later in early 2015, the new Greek government announced that it would sell only 49 percent to SOCAR. The company initially had negatively reacted to the idea of acquiring only 49% of DESFA instead of initially agreed 66%, with a view to be a main decision maker.

However, apparently SOCAR, aiming no to lose this opportunity at the final stage of privatization, discussed the possibility of the transfer of a 17 percent share in the Athens meeting.

The first formal expression of interest in the 17 percent stake in DESFA was received by state sell-off fund TAIPED from Snam, the operator of the Italian network.

Baku has earlier claimed that from Azerbaijan’s perspective, there was no conflict of interest in acquiring a majority stake in DESFA because the owner of the gas to be pumped through the SGC was not Azerbaijan, but the Shah-Deniz Consortium.

The key issue here is that the Commission does not want the control package of such a big Transmission System transferred to the hands of non-EU country, but remain under the Greek control.

Currently, the country is pushing for the European Union’s OK for the planned takeover of Greece’s gas distribution grid by SOCAR, which will eventually strengthen its role in southern Europe’s gas supply system.

SOCAR, which is keen on expanding operations in the retail oil products market abroad is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan. The company includes Azneft (companies producing oil and gas offshore and onshore), Azerkimya (chemical industry) and Azerigas production associations.

Three production divisions, two oil refineries and one gas processing plant, an oil tanker fleet, a deep water platform fabrication yard, two trusts, one institution, and 22 subdivisions are operating as corporate entities under SOCAR.

SOURCE: AZER NEWS

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