Azernews.Az

By Nigar Abbasova

Azerbaijan’s energy giant SOCAR is expecting from the government of Greece compromise proposals, which are needed for the successful implementation of a deal on the acquisition of a share in the Greek gas operator DESFA, Anar Mammadov, head of SOCAR Energy Greece told reporters in Izmir.

He also said that new rules on tariffs for gas in Greece would negatively influence profitability of DESFA.

“New conditions make the project less attractive to us. Therefore, we have proposed a compromise and are ready to work jointly with the Greek side. We have a certain interest in the project, but we also need a sense from the commercial point of view. SOCAR may not be thus much ready for the privatization,” he said.

Mammadov emphasized that SOCAR is currently waiting for return offers from Greece.

“The government [of Greece] is aware of our position. If they are interested in the implementation of the project, they should display their interest. We are not intended to appeal to a court, but there is a probability that we will be forced to abandon the project. SOCAR is ready to fulfill all obligations, should previous conditions stay in force. The term of the letter of guarantee on the tender will expire on September 30. Extension of a term is a simple procedure, but we see no sufficient reason for that. SOCAR, however, still pins its hopes on a compromise,” he said.

Mammadov added that losses of the company, given the revised tariffs, amounts to 40-50 percent of its total cost, according to preliminary estimates.

SOCAR won a tender in 2013 on the purchase of a 66-percent stake in DESFA for 400 million euros ($446.3 million) but the acquisition was stalled, when SOCAR faced EU’s anti-trust concerns and was ordered to sell 17 percent of DESFA to a third party, so that its stake drops to 49 percent and satisfy EU competition authorities. Greece passed a law in July which raised DESFA's gas tariffs, further complicating the sale.

SOCAR hopes it can overcome the EU obstacles, as Italy’s Snam SpA may purchase at least required 17 percent of shares.

Sale of DESFA is part of a privatization programme required under Greece's three international bailouts since 2010.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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