DEPA Privatization Process Provides More Suspense
The privatization process of DEPA has met a further delay. Privatization of Greek public gas company, which should have concluded the binding offer submission process by mid-December, has taken another postponement by the Greek agency for privatizations (TAIPED) without any official explanation.
Unofficially, pundits in Greece cite the political complications on EU regulations that this privatization has ensured due to the speculated offer by Gazprom which outstrips the competition by far, although the particulars of offers have yet to be made public.
An interesting aspect that came about recently is the intention of Sintez Group which participates through its subsidiary Negusmeft, to acquire a larger role than previously thought. Although it was seen as an outsider when compared to Gazprom, SOCAR or the Greece's M & M Gas, Sintez's CEO Andrei Korolev relayed to the press that his company has serious intentions and strives to be a winner.
Sintez-Negusneft is a holding of the Russian multi-billionaire Alexander Lebedev, who has a wide range of activities, especially in UK and Russia. According to the company, Sintez wants to make DEPA a global gas player, while Gazprom's and SOCAR’s intentions as Korolev put it, will be to just monopolize the local market.
Moreover, Korolev stated that his company has a distinct advantage, which is the intention to buy both DEPA and the subsidiary DESFA which is the gas network manager. He estimates that ultimately Gazprom and SOCAR as well will fail to acquire DESFA due to EU rules of competition, thus their efforts would not constitute a full-fledged privatization process.
Another interesting aspect from Sintez point of view, is the belief that SOCAR may eventually ally with M&M gas, an assumption quite interesting judging by the fact that one of the shareholders of the Greek company, the Vardinoyannis family has developed over the years cordial relations with the leadership of Azerbaijan and the Aliyev Presidency in particular, a fact not well-known intendified by Natural Gas Europe a few weeks ago.
That points out that the Sintez group has developed its business intelligence tactics to "feel out" the competition before venturing at the last moment to become a favorite. It’s not by coincidence that British media have talked about Alexander Lebedev's past as a high -ranking KGB officer in London in the 1980's, whilst over the past few years he has been in a sort of a conflict with the Kremlin and Putin's presidency. Therefore Sintez-Negusneft stance in the Greek privatization surely clashed with that of Gazprom and has a Russian political flavor as well.
Sintez's CEO Korolev also noted on the capabilities of his company to assist DEPA into interconnecting its network with that of neighboring countries and also to expand into LNG trade. By that DEPA could become a sort of a global player and a hub for the gas commodity. At that point it is also interesting to note that Sintez operates electricity power stations in Russia and in the Balkans of 2,800 MW capacity, and gets its gas from Gazprom and in favorable terms, presenting another view of the complicated relations between the two gas companies.
In respect to DEPA's privatization, Gazprom that came first as a favorite keeps a low profile, along with SOCAR which seems to prefer an overall delay of the competition so as to coincide with the early 2013 announcement of the Southern Corridor for the transfer of Azeri gas to Europe. In case Trans-Adriatic pipeline is selected, that will surely elevate Baku's interest for Greece, since the pipeline would run from there to the EU.
Lastly the Greek M&M is elevating its lobbying activities within the Greek government and media world, although it has to battles the growing unpopularity of the leading Greek business families, a role which was negatively described in certain high-level reports by Reuters and Stern magazine recently. Suspicion-wary Greek experts believed these attacks were related to DEPA's privatization and aimed against the shareholders of M&M Company.
Moreover, the competition of all these companies has gripped the attention of the Athens-based diplomatic community of most major EU countries and USA which consult on a regular basis local media and politicians in order to examine what lies ahead for DEPA and how the interests of their own country conform or not with the strategies of the players involved. Up to date according to all available and reliable information, German diplomacy seems neutral in the competition , while the American is adamant in accepting a leading role for Gazprom in Greece, citing fears of geopolitical nature. Other European countries such as Italy are in favor of both Russian and Azeri gas, due to the importance of Greece as a traverse point for the commodity to the Italian market.
Neighboring countries such as Bulgaria, Serbia, seem to be favoring Gazprom either due to political reasons or due to South Stream’s project evolution prospects. Lastly the EU’s Commission seems to be divided between the Energy directory and the Competition one, in a period where crucial negotiations are underway with the main EU’s supplier, Gazprom.
In overall, judging by the reluctance of the Greek state to proceed with the privatization of DEPA, it is likely that until binding offers are concluded, upturns and surprising alliances could not be excluded. Sintez latest appearance indicates that this competition may not have a definite outcome.