Gov’t aiming to revive talks over DESFA deal with Socar, Snam

Gov’t aiming to revive talks over DESFA deal with Socar, Snam

Prime Minister Alexis Tsipras is expected to get directly involved in the privatization of Greece’s natural gas grid operator DESFA in the next few days in a bid to end the impasse in the project. This will involve sidestepping Energy Minister Panos Skourletis, who does not see eye to eye with the State Oil Company of Azerbaijan Republic (Socar), which is the chosen buyer, or Italian natural gas infrastructure company Snam, a candidate investor.

Under pressure from the country’s creditors to wrap up the sell-off as soon as possible (given that Socar’s letter of guarantee for the acquisition of 66 percent of DESFA expires at the end of September), the government will seek to restore communications with the Azeri side after this was interrupted due to Skourletis’s poor handling of the deal.

Sources say that in the next few days Tsipras will ask Alekos Flambouraris, his state minister for coordinating government operations, to begin talks with the Azeris, both on a political and on a business level, as well as with representatives of Snam, which is interested in participating in DESFA through the acquisition of a 17 percent stake from Socar. Snam officials met with Skourletis on Tuesday to discuss that participation.

The prime minister’s intervention was deemed necessary as the Azeris have long been asking the government for a “reliable negotiator” on a senior level, suggesting that they have found it hard to cooperate with the energy minister.

That view appears to be shared by Snam, which in its meeting with Skourletis yesterday saw no readiness on the part of the ministry to find a solution that would offset the investors’ revenue loss after the controversial amendment concerning the redefinition of DESFA charges, which according to Socar reduces the grid operator’s value by 40-50 percent compared to 2013, when the Azeris tabled their offer.

Snam’s representative emerged rather disappointed from his meeting with Skourletis. Sources say the Italian representative also raised the issue of the need of a “reliable negotiator” from the government.

Tsipras’s intervention is expected to bring the Azeris back to the negotiating table, with a minimum objective at this stage to secure a short extension to the letter of guarantee so as to allow some time for a compromise to be reached.

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