Greek Natural Gas Privatization Struggles Ahead
The privatization process of Greece's DEPA & DESFA struggles ahead, amidst corporate and international antagonisms.
Recently, Greek Premier Antonis Samaras held a special meeting with the Ministers in charge together with the head of the Greek privatization agency (TAIPED). Samaras ordered that the binding offers for the two entities should be submitted no later than the 12th of April, so as to finalize the whole process by early summer at the latest.
Concurrently, the Greek Premier met with a delegation lead by the Russian Ambassador to Greece, which expressed its concerns over alleged involvement by American diplomatic authorities in attempting to obstruct a potential winning bid from Russian based suitors Gazprom and Sintez-Negusneft.
The whole issue has stirred spirits in Athens lately with all leading media citing a frenzy of diplomatic activity and pressure on the Greek government from both Washington and Moscow, whilst Brussels and Greece's biggest lender, Germany, are urging the country to finish off the competition as soon as possible so Greece can raise amounts needed for its stabilization program. Presumably, that course is now been followed by the Greek government, who seems content to wait until April and then make its final decisions based on a mixture of financial and political considerations.
An interesting point is that TAIPED, which is responsible for the privatization process, has changed one of the terms of the competition and allowed previous contesters to partner with the existing ones (Gazprom, Sintez, PPF-GEK, SOCAR., M & M). That change occurred as the Greek government wanted to raise the competition level (and perhaps generate a higher bid), and also to ease diplomatic tensions by shuffling once more the contesters.
Nevertheless, previous participants such as Gas Natural, GDF, Mitsui, Israel Corp. did not decide to re-enter the contest by joining one of the final four contenders. Unofficially it is speculated that the Italy's Eni is indeed in talks with Gazprom, a move which can be considered as natural since both companies cooperate closely and most importantly in South Stream natural gas pipeline project. In the case a Eni-Gazprom partnership cements, it will be a definite favorite for the competition given their combined size and potential for submitting an all-inclusive binding offer that would be hard to be refused by Athens.
Gazprom has decided to decrease the price for gas sales to Greece for 2013 and is also in negotiations for further cuts, a move that is also part of its Pan-European trial to hold on to the EU's liberalized market, whilst playing the card of the reliable supplier in light of the privatization process. At the same time, Moscow is subtly increasing pressure on Greece by both offering great investments (like those mentioned by Sintez recently of 2 billion euros for the companies plus 5 billion euros investments) and by reminding Greece of its further interest in transport, tourism and infrastructure privatizations that would be lost if Greece succumbs to "outside political pressure." The Moscow Times presented such views by stating that Greek-Russian business relations depend nowadays on the natural gas privatization.
Regarding the alleged American pressure on Greece not to accept Russian offers regardless of price, a high-ranking Greek state official with direct knowledge who wishes to remain anonymous, stated to Natural Gas Europe “there have been indeed several unofficial initiatives by US State Department officials that cited geopolitical reasons against Russian gas investments in Greece. On a formal inter-state level though there has been no involvement...the Greek side has asked its American partners through unofficial diplomatic channels why there are no American companies interested, but there was no reply....The EU is the only one that actually pressures Athens right now into the direction of raising as much money as possible in order to showcase to the European taxpayers that the stabilization program is actually a success."
Finally it’s likely that the Greek government in a bid to exaggerate the importance of DEPA-DESFA to the potential buyers is overplaying the "Geopolitical card," whilst local business interests that are afraid to lose their traditional privileged relations with the public gas sector, are also trying to obstruct the privatization process via a variety of lobbying methods. The only factor that has been corroborated, is the intention by the so-called "Northern Alliance" of the Eurozone to push forward with the selling of Greek gas sector, in light of the general elections in Germany and Austria in September 2013, where debate will be generated on the success (or not) the Greek fiscal issue, which in turn is impacted by the success of the privatizations in terms of monetary revenue acquired.