Gazprom Walks From Greece's DEPA
Gazprom has decided not to place a final bid for Greece’s state-owned natural gas supplier, DEPA.
“We have carefully weighed the benefits and risks of Gazprom’s participation in the tender and decided not to submit a binding offer,” said Alexander Medvedev, Gazprom’s deputy chairman.
The surprising twist places Greece’s privatization process in disarray, imperiling plans by Taiped, the Greek privatisation agency, to achieve to achieve the target of €2.6 billion in privatisation revenues in 2013 as was agreed with the so called 'troika' of lenders, the International Monetary Fund, the European Central Bank and the European Union.
A Gazprom acquisition of DEPA appeared to be a foregone conclusion. Gazprom boss Alexi Miller recently made his third visit to Greece in less than two months for high-level negotiations with political leaders including Greek Prime Minister Antonis Samaras.
The Greek government had agreed to several measures to facilitate the Russian offer, including reducing the initial deposit required to ten percent of the total amount to be paid and agreeing that the deal would be cancelled if Athens abandoned Euro currency.
Sources indicated that Gazprom linked, though not in writing, the takeover of DEPA with substantial gas price reductions for the Greek market and the construction of a South Stream arm in Greece to be used for transferring gas for an international LNG terminal to be undertaken by Gazprom.
Gazprom was said to be offering around €950 million for DEPA, while the rival Greek consortium M&M reportedly offered amounts ranging from €400 - €550 million.
Greek Energy Minister, Makis Papageorgiou, said fresh bids for DEPA would be solicted later this year.
It may be that pressure from the United States and the EU played a role in Gazprom’s withdrawal. Both expressed concern over Gazprom further extending its interest in the European energy market. The EU had also indicated that it would not approve a sale to Gazprom based upon competition issues.
Some observers also viewed the Gazprom bid as a potential impediment to the success of the Trans-Adriatic Pipeline project (TAP), which is involved with the Nabucco West consortium in a tightly contested battle to move gas from Azerbaijan’s Shah Deniz field to Europe
TAIPED still hopes to proceed with the sale of DESFA, which manages Greece’s gas transmission network. The two main contesters are Russian Sintez, which made known it will not pursue its bid for DEPA and Azerbaijan's state-owned gas company SOCAR. Sintez initially offered €1.9 billion for both DEPA and DEFSA, while SOCAR around €450 million for DESFA only. Reports indicate that the Azeri’s plan increase their bid and have also linked their offer with the construction of TAP.