Gazprom withdraws interest for Greek gas firm DEPA on deadline day, say reports

Πηγή: ekathimerini
June 10 2013

Russian energy giant Gazprom did not submitt a binding offer for Greek natural gas firm DEPA before Monday’s deadline, reports said.

Gazprom was expected to be the only major bidder for DEPA but both capital.gr and Reuters reported that the Russian firm did not declare its interest.

Capital.gr reported that a disagreement over the price at which Gazprom would supply gas to Greek households led to the firm withdrawing its interest. Greece currently pays about 30 percent more than the European Union average for the natural gas it imports from Russia.

The government had been hoping to secure a commitment from Gazprom to lower prices.

Gazprom's only rival for DEPA is M&M Gas, a joint venture by Greek energy firms Motor Oil and Mytilineos. But reports suggested that M&M had also failed to submit a binding bid by Monday’s deadline.

The Russian firm has made a preliminary bid of 900 million euros, whereas M&M offered 550 million.

The failure to secure an offer for DEPA would be embarrassing for the government, which had extended the deadline as it sought to accommodate Gazprom.

The sale of DEPA, along with that of state gambling firm OPAP, were the flagship privatizations of this year. Even with those sales, it appeared that the government would not meet its reduced target of 2.6 billion euros in revenues for this year.

Reuters also reported that another Russian firm, Sintez, withdrew its interest for the purchase of gas network operator DESFA on Monday.

If this is the case, Azerbaijan΄s state company SOCAR is likely to be the only firm to place a binding offer for DESFA.

Editor's note: According to protothema it was the EU Competition Commission that blocked potential acquisition of DEPA and DESFA by Gazprom and Sintez respectively.

Greece: ‘Heading for turmoil in the Aegean?’

Turkey have recently received a special boat with which it will start surveying inside Cyprus’ EEZ

Recently Greece’s creditors expressed their disappointment on the issue of privatizations.

One that is pending without any visible reason is that of DEPA and DESFA the state oil and gas companies since November.

 It seems that from the 5 companies that have expressed interest and are still in the bid giving non-biding offers the two Russian are the favourites as their offers are almost the double from the second.

The state company that arranges the privatizations (TAIPED) said that it is going to accept the highest bid (without any regard on geopolitics).

But it seems that Washington as well as Brussels have a different opinion.

That is why TAIPED changed the clauses and now asks from companies that had left the bid during an earlier stage to come back and make new offers cooperating with any of the five existing ones.

On February 13th it will be signed the agreement between Greece-Italy-Albania on the TAP (Trans Adriatic Pipeline).

There will be present a delegate from Azerbaijan from where the gas will be transported to Europe and which is to decide if TAP will be built rendering Greece’s existing infrastructure useful.

Interestingly the ‘second’ company apart from the two Russian (Gazprom and Negusneft) is the Azerbaijani state oil and gas company SOCAR which is the head of the Shah Deniz joint venture.

SOCAR is said that after the change of clauses will join the two Greek consortiums comprising M&M GasCo, Mytilineos Holdings, Motor Oil Hellas Corinth Refineries and a joint bid by PPF and GEK Terna Holding Real Estate Construction. Bilateral relations with Greece with emphasis on the energy sector are dated back to 2011.

This scheme is supported by US ( U.S. ties with Azerbaijan serve to “contain” Russian and Iranian influence and diversify the European energy sector, See page 50) and the owner of Motor Oil Mr. Vardinoyannis knows personally the President of Azerbaijan Mr. Ilham Aliyev.

On early March Mr. Samaras is going to visit Washington while a trip to Moscow is reported as canceled. At the same time EU is going to decide about bailing out Cyprus (which is accusing of laundering money of the Russian mafia), Russia will decide on easing the terms of the loan it has already extended to Cyprus and Turkey have recently received a special boat with which it will start surveying inside Cyprus’ EEZ and near the Greek island Kastelorizo (inside Greece’s potential EEZ that recently the government leaked that is ready to declare).

At the same time in Athens the 54th round of exploratory talks between Greece and Turkey have started but passing unmentioned.


UPD: It is said that finally Sintez (Negusneft's affiliated company) decided to leave from the bid since its offer (1,9 million euros) was by far the highest but TAIPED hesitated to make decisions and delayed the possess.

UPD1: Sintez on Feb 7th denied that is leaving from the bid. The deadline for the final offers will be on April 12th.

CEO of Sintez Group: 'Greece’s transformation into a natural gas transit hub for Europe'

Πηγή: Natural Gas Europe
Jan 29 2013

The CEO of Sintez Group, Andrey Korolev, provides us his views and comments regarding the participation of Sintez's subsidiary Company Negusneft in the privatization competition for the Greek natural gas companies DEPA & DESFA.

He answers on the key questions surrounding this privatization, especially competition issues, corporate challenges and considerations, along with Negusneft’s future intention regarding the Greek natural gas market.

"If we win the DEPA/DESFA auction we will be committed to comply in full with EU energy regulation"

What are the general intentions regarding Negusneft's participation in the DEPA-DESFA privatization process, and more specifically, how does your company view the prospects of the Greek natural gas market?
“We believe that DEPA and DESFA are high-quality assets that can play a meaningful role inGreece’s transformation into a natural gas transit hub for Europe. This development would clearly be of benefit to the Greek economy through diversifying Europe’s gas supply options and ultimately bringing gas prices to a more competitive level, with lower energy prices being a key element of any long term economic recovery. As a long-term player in the Balkan’s energy market, SINTEZ wants to play a role in that transformation.

DEPA and DESFA are a natural fit with SINTEZ Group’s existing business assets in the Balkans, namely our combined cycle heat and power project in Skopje, which we have already been in talks with Greece about connecting to DEPA via a Greece-Skopje interconnector project. There are a number of additional infrastructure-related opportunities that make DEPA and DESFA a strong platform for growth in the region.

The challenges that Greece is currently facing cannot last forever. Having operated for 25 years in the former Soviet Union and countries such as Namibia and Indonesia, our company is quite adept to working in such challenging and transitional environments.”

What is your opinion regarding any challenges you may have experienced as a company during the privatization process thus far and how do you assess your communication and cooperation with the Greek authorities?

“We are pleased that the HRADF (Privatization agency) recently has commenced the final round of the privatization of DEPA and DESFA, albeit later than was originally announced. Now, shortlisted companies, including SINTEZ subsidiary Negusneft, will have access to the data room and necessary documentation in order to put together a comprehensive binding offer for DEPA and DESFA.”

It would be of great interest to note from you, around the future projects or strategy by your company in relation to DEPA-DESFA. How do you see a potential partnership unfolding and what may be your investment plans for these companies?

“Clearly, the transformation of Greece into a gas transit hub for Europe will require a great deal of investment for new infrastructure. However, it goes without saying that the development of the Greek gas market will be beneficial for the country, as it can create new jobs and, more importantly, diversify natural gas supplies into the country, thereby spurring competition and having a positive effect on gas prices in the region.”

With regards to another issue that has recently gained prominence in the EU and Greece, that is the competition rules as implemented by Brussels and the compliance of natural gas companies with the Thrid Energy Package. In your view, does this affect your company in relation with its intentions to bid for both DEPA & DESFA?
“SINTEZ Group is an independent company and we do not have the conflicts of interests as with some other bidders, who are state-owned gas producers. If we win the DEPA/DESFA auction we will be committed to comply in full with EU energy regulation, while at the same time diversifying gas supplies and investing in infrastructure to transform Greece into a natural gas transit hub. We remain confident that given our strategic focus on the Balkans and relevant sector expertise, SINTEZ Group is the right fit to further develop DEPA and DESFA.”

Editor's note: According to Al Jazeera "The waters off the Greek island of Crete could hold up to 3.5 trillion cubic metres of natural gas

".

Gazprom and the European imbroglio

Πηγή: Europolitics
By Marie-Martine Buckens
Jan 18 2013

The presence of the Russian giant Gazprom on the short list of companies selected by the Greek privatisation fund as potential buyers of the Greek gas company DEPA is still a hot topic of debate (see Europolitics 4563).The Financial Times reported, on 10 January, that the EU and the United States had cautioned against seeing the Greek economy controlled by Russian interests, while a Commission spokesman, interviewed byEuropolitics on 17 January, simply stated that “the Commission, in the framework of the World Bank, IMF and EU troika, is in permanent contact with the Greek government and the privatisation fund in particular on the privatisation of DEPA and its subsidiary DEFSA”. He added that the executive “is aware that while the privatisation fund has not yet finalised its selection process, the acquisition of DEPA and/or DEFSA will have to comply fully with competition rules in force in the EU single market”.

The fact remains that Gazprom’s intrusion in Greece adds to the Russian firm’s image of dominant position, already fuelled by the anti-trust procedure launched against it by the Commission last September.

INTERVIEW WITH AURÉLIE BROS

Things are not quite that straightforward, according to Aurélie Bros, doctoral candidate in geopolitics at University Panthéon-Sorbonne and at the Russian Academy of Sciences. For this researcher, co-author with Yann Richard of a study entitled ‘Les stratégies de Gazprom: un problème géopolitique?’ (‘Gazprom’s strategies: A geopolitical problem?’), the company’s relations with the EU should be analysed in the light of the structural divisions that can be observed in Europe and not as a head-on confrontation between the EU and Gazprom or even between the EU and Russia. There is no real consensus for now on the position to take towards Gazprom, whether at European or national level, or between energy firms. But above all, she adds, it is important not to mask the strategies of large European firms that participate in steering this dialogue with the Russian firm by setting up consortia, common projects and so on.

In your 2011 study (1) , you highlight the fact that European gas companies find themselves caught between EU legislation, in particular the third energy package, and their need to carry out profitable operations.

The energy sector has been built on vertically integrated companies that operate primarily on national markets. At present, EU legislation and particularly the third energy package has prompted these firms to reconsider their strategy, organisation (separation of certain activities), etc, since the EU’s aim is to create a single market. This phase of adaptation for energy companies has created tension.

This tension is not limited to differences of views between the EU institutions and companies, which have to combine strategy and compliance with internal market rules. It is very difficult to build consensus in the energy sector and there is multi-scale opposition. It can be seen within member states. Take the case of Germany, for example, where the phase-out of nuclear power is still giving rise to many questions. There are also divisions between member states, divisions stemming from history, geography, etc. The Western EU countries do not have the same position on Gazprom or Russia as the Central and Eastern European member states. And there are many more examples. This accumulation of divisions that are not always directly perceptible confuses the issue, with the result that the foreign partners, in this case Russia, sometimes have trouble analysing and understanding the European market.

What is your analysis of the policy implemented by the EU institutions, the Commission in particular?

Within the Commission there are also different ways of addressing the problem. That is the case for the anti-trust procedure initiated last September against Gazprom. It was launched by DG Competition, whose role is to guarantee fair competition.

In parallel, DG Energy tends to focus more on establishing and strengthening dialogue with external partners, for instance with its negotiation of the EU-Russia road map until 2050, aimed at setting up a stable and lasting energy sector dialogue between the EU and Russia.

How do you analyse developments in the Southern Corridor gas negotiations?
This is a key project for the European Commission, aimed at supplying Europe with gas resources from the Caspian Sea (Shah Deniz). The negotiations have not been completed but it is certain that the Nabucco project in its initial form will not come into existence. It is more likely that there will be a smaller, mixed project. The EU’s support is primarily political, yet in the final analysis it is companies that will have to put up the money. The case of Nabucco – backed by the EU – is exemplary. It turned out that the project was no longer profitable and that gas supply was uncertain, since Iran cannot be considered as a potential supplier. The Russians wish to circumvent Ukraine after the tension that occurred in 2009 and will build the South Stream gas pipeline, a project that does not form part of the Southern Corridor.

How do you explain that, in contrast with Gazprom, there are no European companies on the list of possible buyers of the Greek public gas company?

Good question. I can only say that Greece has a very advantageous geographical situation. The country is close to Turkey, through which gas from Azerbaijan will likely be delivered, but also to Israeli and Cypriot gas fields. Gazprom will have to comply with the separation of gas production and distribution activities required under the third energy package. In the case of Greece, the distribution aspect is important. The companies are positioning themselves either on the production aspect or on distribution. Gazprom seems to be giving priority to distribution.“The Western EU countries do not have the same position on Gazprom or on Russia as the Central and Eastern European member states” 

 
(1) The study is available here

Greece to sell gas firm, grid operator this year: source

Greece's Prime Minister Antonis Samaras addresses parliamentarians during a session at the parliament in Athens July 8, 2012.

Πηγή: Reuters
August 6 2012

Greece wants binding bids for its state-owned natural gas company and gas grid operator by the end of September and hopes to complete their sale in late autumn as it revives its privatization drive, a government official told Reuters on Monday.

Hoping to regain credibility with international lenders keeping Greece afloat, the new conservative-led government has made speeding up privatizations a priority but has admitted delays from repeat elections in May and June.

After a meeting between political leaders and the finance minister on privatizations, the official said the government's priorities also included the sale of betting firm OPAP, the old Athens airport and buildings in Athens and on the islands of Corfu and Rhodes.

"What we're aiming for through the privatizations, apart from generating revenues, is to change the role of the state in the economy," the official said on condition of anonymity.

He said Russian, Italian, U.S. and French companies had expressed an interest in the natural gas company DEPA and gas grid operator DESPA.

Athens initially targeted privatization proceeds of 50 billion euros ($62 billion) by 2015 but cut the target to 19 billion euros after a making slow start on the program.

Former privatizations chief Costas Mitropoulos, who stepped down last month after accusing the government of hindering his efforts to sell assets, estimated that Athens would not raise more than 300 million euros from privatizations in 2012.

It had targeted 3 billion euros for this year.

More than 90 percent of the privatization program includes the lease and sale of concessions of state land and infrastructure, the government has said.

Conference addresses energy security issues in Cyprus and the EU

Minister of Commerce, Industry and Tourism Neoclis Sylikiotis

Πηγή: Financial Mirror
April 3 2012

The Government aims at turning Cyprus into a regional energy hub, Minister of Commerce, Industry and Tourism Neoclis Sylikiotis said on Monday, while referring to actions taken at EU level to secure the bloc’s energy supply and set ambitious targets in the fields of energy and climate change.

Sylikiotis was addressing a conference, in Nicosia, on “Energy Security in the EU”, organized by the European Parliament Office in Cyprus and Greece and the Ministry of Commerce, Industry and Tourism.

The Minister said that Cyprus was working towards the goal, set by the EU, to lift the energy isolation of the member states by 2015 and referred to a draft regulation that has been recently adopted by the European Commission, setting out the guidelines on the development of transeuropean energy infrastructure.

As Sylikiotis said, the draft regulation sets a number of transeuropean energy corridors and priority zones, concerning electricity and gas networks and prioritizes twelve particular infrastructure projects of strategic importance, which need to be completed by 2020.

Cyprus is included in two of these natural gas corridors and one electricity corridor, along with other member states, the Minister went on. He added that this draft regulation comprises one of the highest priorities of the Cypriot EU Presidency, due in second half of the year.

“Our goal is the successful conclusion of negotiations, both among member states in the Council of the EU, as well as between the European Council and the European Parliament” Sylikiotis said.

He noted that the benefits for Cyprus from the adoption and implementation of this regulation are identical with those that will incur for the rest of the EU.

The Minister finally said that Cyprus and the wider Southeastern Mediterranean region aspires to become an alternative energy source, feeding EU energy demands and noted that energy infrastructure ought to be developed in serving this goal.

MEP Eleni Theocharous, while addressing the conference, said that Cyprus should raise an “energy shield” around it, which would guard the country from Turkey’s threats. She also noted that Cyprus should enter into a strategic cooperation with Greece and Israel on energy matters, and talked about the need to pair Cyprus-Russian interests in the field.

Turkey, whose troops occupy Cyprus’ northern part since they invaded in 1974, does not recognise the Republic of Cyprus. Following a decision by Nicosia to begin natural gas and oil exploration in its exclusive economic zone last September, Ankara has deployed warships in the Eastern Mediterranean and has signed an illegal agreement with the Turkish Cypriot regime in occupied Cyprus to delineate what it calls continental shelf.

The government of Cyprus has protested to the UN and the EU Turkey’s moves, saying it has a sovereign right to exploit its natural resources.

The Cypriot MEP said that Greece ought to have delineated its Exclusive Economic Zone a long time ago, including the remote island of Kastelorizo, close to the southwestern coast of Turkey and noted that in this case, cooperation with Israel was essential.

“Greece and Cyprus can provide Israel with the strategic depth it needs”, Theocharous said, adding that cooperation in energy matters can provide a catalyst for the solution of political problems in Cyprus and the Middle East.

The MEP further said she expected Turkey to escalate tension in the region, in view of the upcoming Cyprus EU Presidency and energy developments.

The goal is Cyprus to become an indispensable energy provider for the EU, the MEP went on, adding that Nicosia would avert blackmailing practices by neighboring countries if it could assume this role in a credible manner.

Cyprus Energy Regulation Authority Vice President Constantinos Eliopoulos said from his part that energy production in Cyprus suffered a major blow last summer, with the blast incident at Mari, near Limassol, but noted that the country would be able to meet energy demands the coming summer, based on energy production units stationed at the government-controlled areas of the Republic if Cyprus.

He also spoke of the need to import natural gas to Cyprus the soonest possible, for use in lower-cost energy production, and said that in case there will be a delay in the arrival of Cypriot gas, alternative solutions should be considered.

Dean of the University of Cyprus Engineering School Panos Papanastasiou talked moreover on the security and environmental aspects of drilling activities and noted that Cypriot MEPs should press the EU to implement stricter rules towards this aim.

Piraeus University assistant professor Nikolaos Farantouris said the EU started to develop a European energy policy only after ascribing energy matters to the EU’s shared competence with the Lisbon Treaty.

Director of the Greek Public Power Corporation (DEI) Quantum Energy George Killas said the completion of the 450-nautical-mile Israel-Cyprus-Greece submarine cable, at a depth of 2,000 metres, would be a technical and political challenge of historical importance for the future of Israel, Cyprus, Greece and the EU, noting that the project would act as an energy bridge between Asia and Europe.

The conference was addressed by the Head of the European Parliament Office in Cyprus Tasos Georgiou, who spoke about the role of the European Parliament in energy matters.

It was furthermore addressed by Director of the Hellenic Gas Transmission System Operator (DESFA) George Paparsenos, who presented the strategy and prospects of DESFA, European Parliament Spokeswoman Christina Antigoni Elefterie, who referred to the proposed Directive for energy efficiency, and Cyprus' Environment Commissioner Charalambos Theopemptou, who focused on the case of Cyprus regarding the acquis communautaire concerning energy efficiency.