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09/12/2016

Greece optimistic about gas grid deal with Azerbaijan’s SOCAR

Europe's East

Greece optimistic about gas grid deal with Azerbaijan’s SOCAR

This flagpole, in Baku, is believed to be the second tallest in the world. [Georgi Gotev]

Azerbaijan’s state-owned oil company SOCAR has confirmed its interest in acquiring a stake in Greek gas grid operator DESFA, with a deal possible by the end of the year, Greece’s privatisation agency said on Wednesday (26 August).

The deal, which has been under negotiations since 2013, would involve SOCAR buying a 66% stake in DESFA for an estimated €400 million from the Greek government and Hellenic Petroleum.

>>Read: Azerbaijan’s SOCAR buys Greek gas operator DESFA

The European Commission has expressed serious concerns about the sale, and has been reviewing it. Conversely, Azerbaijan has expressed concern over the Commission taking too long to decide if the deal is compatible with EU law.

>>Read: Aliyev: Azerbaijan concerned by Commission’s DESFA investigation

A Greek privatisation official has said that Athens was examining an option under which SOCAR would buy the stake, and then divest at least 17% either to the Greek government, or a third entity, to address the EU’s concerns.

Greece’s privatisation agency HRADF and Hellenic Petroleum met SOCAR officials on Wednesday, and all the parties reiterated their commitment to complete the agreement as soon as possible, HRADF said in a statement.

Greece’s privatisation plan has produced poor results since the country signed its first bailout in 2010, and many asset sales have been in doubt since a leftist government took power in January.

Under a third rescue deal of up to €86 billion signed with its international lenders earlier in the month, Greece has promised to raise €1.4 billion from asset sales this year.