He said enacting the bill would risk SOCAR’s purchase of DESFA.
“SOCAR will demonstrate its official position immediately after the amendment is adopted. We are ready to continue negotiations with the Ministry of Energy to reach agreement on preventing this amendment from coming into force. We had a meeting with Greek Energy Minister Panos Skourletis. The minister has a resolute position that these changes are essential for the protection of the domestic gas market. The Minister said that these changes are fully consistent with the laws of Greece and Europe and have nothing to do with the process of privatization,” he added.
Skourletis said the price adjustment was not reflected in the terms of deal and tender. The minister noted that Greece isn’t going to backtrack from the privatization of DESFA.
“The ministry is not willing to backtrack on this,” a senior energy ministry official told Reuters on condition of anonymity, adding the legislation would help reduce energy costs and protect Greek industries and consumers.
“SOCAR must understand that this has always been the Greek government’s right and it is not among the terms of the sale agreement,” said official.
Greek officials claimed that as SOCAR agreed to buy a 66% stake of Greek natural gas grid operator DESFA for €400 million, it will get €547,17 mln of €830 mln revenue. However, the amendment to the law would reduce this figure by €200 mln.
Mammadov added that SOCAR is interested in finding a compromise solution that will both protect the interests of gas consumers of Greece as a future shareholder of DESFA, and ensure the company`s value. He refuted the claims of €830 mln revenue. “It is an unreal figure that was not included in the financial statements of DESFA. It was only a “promise” given to the company to compensate reserves from previous years, that was also failed for some reasons,” he noted.
Currently, the Directorate-General for Competition of the European Commission is considering the issue on privatization of DESFA. On July 31, 2013, the Hellenic Republic Asset Development Fund approved the transaction on purchase of 66% of DESFA shares by SOCAR for €400 mln.
In December 2013, SOCAR and Greece`s state privatization fund and Petroleum companies signed Contract on Shareholders and the Share Purchase Agreement (SPA). SOCAR purchases 31% share of DESFA from Greek government, 35% from Hellenic Petroleum SA. HRADF will control share package of the DESFA prior to the SOCAR takes over control on it.
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