Further state sell-offs due soon in the energy sector

Things are moving in the energy sector. The government wants to wrap up talks on the part-privatization of Hellenic Petroleum, the country’s largest refinery, before embarking on further sales of stakes in the state electricity company, the Public Power Corporation (PPC), and state natural gas distributor DEPA. The government is also pushing for participation in international electricity grid connections and wants to ensure Greece’s access to as many sources of oil and natural gas as possible. In the case of the Hellenic Petroleum part-sale, the government has been negotiating with the Lukoil-Latsis Group consortium for three weeks. The group has bid to acquire a 23-percent stake in the company. Economy and Finance Minister Nikos Christodoulakis has said he wants to finish talks by the end of the month; however, the most serious items of the agenda have not been tackled yet. One such item concerns the absorption of Petrola, the Latsis Group’s refinery, by Hellenic Petroleum. There have also been points of disagreement during the talks, mostly concerning the Bulgarian market. In Bulgaria, Lukoil, the largest Russian oil company, has had a majority stake in the Neftokhim petrochemicals group since 2000. Hellenic Petroleum has recently opened an office in Sofia and next month will begin operating a commercial subsidiary, EKO-ELDA Bulgaria. Hellenic Petroleum has asked Lukoil for access to its gas stations in Bulgaria. Lukoil’s reply was that it does not control most of the stations, though it is their sole supplier. The issue will be discussed again. The Lukoil-Latsis consortium also turned down an offer by Hellenic Petroleum for a joint bid to acquire a 25-percent stake in and the management of Croatia’s state refinery. The refusal means that the future partners will be rivals in the bid; they have already submitted separate ones for Yugoslavia’s Beopetrol. Despite these differences, Christodoulakis appears confident that the talks’ successful conclusion, preferably this month, will spur the privatization of DEPA and the sale of a second stake in PPC. The government sold a first stake in PPC, about 16 percent, last year. Yesterday, DEPA’s annual general meeting approved the company’s 2001 accounts. Last year, turnover rose to 135 billion drachmas (396 million euros) and pretax profit to 3.8 billion drachmas (11.15 million euros). Also yesterday, Development Minister Akis Tsochadzopoulos visited Bosnia-Herzegovina, where he held talks with President Beriz Belkic and the prime minister of the Muslim-Croat federation, Alija Behmen. Tsochadzopoulos said the Bosnian officials were especially interested in joining European electricity grids and in the planned Turkey-Greece-Croatia-Austria natural gas pipeline. Tsochadzopoulos was accompanied by Hellenic Petroleum, PPC and DEPA officials, as well as Greek private-sector operators.

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