ECONOMY

FYROM re-examines sale of OKTA to Hellenic Petroleum

The new government of the Former Yugoslav Republic of Macedonia (FYROM) appears ambivalent toward a major investment by Hellenic Petroleum, namely the 1999 acquisition of a 66.5 percent stake in state refinery OKTA. Prime Minister Branko Crvenkovski had repeatedly questioned the transparency of the agreement when it was signed and during the election campaign. Greek businessmen, including Hellenic Petroleum managers, had insisted that the new government would do nothing, mindful of damaging bilateral relations. It appears, however, that the FYROM government is willing to re-examine aspects of the agreement. Last week, Radmilla Sekerinska, one of two deputy prime ministers, announced that an «experts committee» would be formed within the Finance Ministry to discuss possible changes to the 1999 agreement. The reasoning is that the European Union, with which FYROM has signed an association agreement, objects to OKTA’s monopoly and the advantages that result from it, such as very low taxes on crude oil imports from Greece. Actually, it was Sekerinska herself who raised the issue with a visiting EU official on November 13, despite her subsequent denials to Hellenic Petroleum’s managing director, Athanassios Karachalios. For the time being, Hellenic Petroleum’s management has adopted a non-confrontational stance. Karachalios told Kathimerini that no official demand to review the OKTA acquisition agreement has been made and that the present government, like the previous one, is implementing the agreement. In his meeting with Sekerinska the previous week, they discussed the extension of the Thessaloniki-Skopje pipeline to Kosovo. Privately, Greek officials are worried, saying that perhaps the new government is making these noises to justify its pre-electoral opposition and that no negative developments will occur. In an interview with Kathimerini at the beginning of October, Crvenkovski had repeated claims casting doubt on the legality of the investment. «We have not even seen the agreement. When it came to Parliament for ratification, deputies did not know its exact content, as there was mention of various paragraphs and notes that were not revealed. We must first see what exactly was agreed upon,» he had said. He did not rule out the issue being reopened and returned to Parliament for further scrutiny. The Thessaloniki-Skopje pipeline, opened at the end of June, is 210 kilometers (130 miles) long, with 150 km inside FYROM territory. A total of $110 million was spent on its construction, of which $60 million was privately raised by Hellenic Petroleum. The rest was provided via a loan from the European Bank for Reconstruction and Development (EBRD). Hellenic Petroleum owns 80 percent of the pipeline, with the FYROM government holding the other 20 percent. The pipeline is operated by Hellenic Petroleum subsidiary ELPET Valkaniki SA, which owns the OKTA stake.