Socar has found a way to opt out of the DESFA deal

A new obstacle has emerged in the arduous process of privatizing gas transmission network operator DESFA, as Azeri firm Socar has found a way to disengage itself from the sale, following the government’s recent energy overture to Russia with the Turkish Stream pipeline.

The new obstacle emerges from a clause in the preliminary agreement between Greece and Socar, which says that the investor can opt out of the deal after 24 months from the tender’s conclusion if the transaction is not completed and the investor is not responsible for the delay. The period of two years will elapse next month, the letter of guarantee will expire and the Azeris are likely to take the opportunity to bow out as they are losing interest in seeing the deal through. Sources suggest that Socar has been looking for a way out of its commitment to purchase 66 percent of DESFA and the expiry of the letter of guarantee in June may be just the ticket for the Azeri state firm.

Socar is said to have been skeptical about its entry in DESFA from the start, as its participation in the tender was dictated by political priorities, namely the geopolitical transaction between Azerbaijan and the European Union, with the support of Washington. This is also why Socar was puzzled by the obstacles raised by competition authorities in Brussels against the completion of the DESFA deal.

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