Russia’s Gazprom Pulls Out of Greek Gas Deal

June 11, 2013Greeceby EW News Desk Team


Greece’s troubled privatisation programme suffered a massive blow on Monday after Russian energy giant Gazprom withdrew its interest in the country’s gas monopoly Depa, citing concerns about the company’s viability, while the country’s gas grid operator Desfa received only a single bid.

Gazprom had been the most prominent of five possible contenders for Depa and Greece had pinned hopes on a Gazprom bid to revive interest in the sale.

But Gazprom spokesman Sergei Kupriyanov said it had not submitted a bid because of “significant risks” to the Depa’s financial viability, adding that it was already experiencing difficulties with users’ unpaid bills.

Related: Greece Prepares $50 Million Emergency Fund Amid Looming Energy Crisis

However, the Greek privatisation agency Hellenic Republic Asset Development Fund disputed the comments.

"Under no circumstances can the absence from the tender be justified, especially when there has been such great interest expressed after months-long thorough procedures," the agency said in a statement, adding that it had given guarantees that Depa's future financial position wouldn't worsen and agreed to cover up to 180 million euros of potential debts owed to Depa until the end of 2015.

"They should, therefore, seek the reasons for the non-participation of Gazprom elsewhere and not on the Greek side," it said.

Greek officials instead blamed the failure of an offer for Depa, which holds a state monopoly on the Greek gas market, on European competition authorities, who raised last-minute concerns over Gazprom's dominant market position inside the European Union. According to the officials, the Russian company was warned not to proceed with an offer late last week.

Related: Greece Eyes $2 Billion Investment, 2,000 New Jobs From Europe Gas Pipeline Deal

Bidders had been invited to express interest in either buying all of Depa and a 66 percent stake in Desfa or just acquiring Depa, according to an e-mailed statement from the Athens-based privatisation agency. The fund confirmed later that Azerbaijan’s Socar had submitted the only bid for Desfa.

Greek Deputy Energy Minister Asimakis Papageorgiou said on Monday Depa’s privatisation “will be reviewed and relaunched very soon," and confirmed that Russian officials had raised concerns over Europe’s strict competition rules.

Failure to find a buyer for Depa – which Athens hope could raise 900 million euros – comes as representatives of Greece’s international creditors began a review of the Athens’ progress in meeting its bailout targets.

In exchange for two EU-IMF bailouts worth 240 billion euros, Greece has agreed to raise 9.5 billion euros through asset sales by 2016, down from an initial target of 50 billion euros by 2019.

Related: Greece’s Economy Shrinks Again, Govt To Sell Police HQ & Other Ministry Buildings

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