DEPA Privatization Gains Pace
The process to privatise Greece's DEPA, which has stalled for a few weeks presumably due to intense political, diplomatic and corporate pressure, resumed on Wednesday 16th of January, after the agency for privatizations (TAIPED) announced that all participating companies have made the short list.
It was announced that Gazprom, SOCAR, Sintez-Negusneft, PPF-GEK and M&M, will move on with the process.
Moreover TAIPED endorsed the so-called "Process Letter" of the competition. All bidders will have access to the data room and to updates on DEPA and its network manager subsidiary DESFA.
Furthermore, it was decided that the process will be concluded within three month. By the beginning of February the companies will begin the due diligence process for DEPA, which should be concluded by early April 2013. Final offers are to be submitted weeks thereafter, with final selection will be announced by mid-May.
TAIPED sources also revealed that all four bidders have passed all tests regarding their willingness to ensure energy security for the country and their compliance to the EU's 3rd Energy Package. That means abiding by the regulations by Brussels to unbundle any ties between DEPA's commercial natural gas activities with DESFA's gas network system, thus leaving space open for competition.
The latest developments regarding the privatization reveal that the Russian companies Gazprom and Sintez-Negusnef, have complied with the regulations involved. Furthermore, it appears that Athens has not reacted to diplomatic pressure exercised by the United States which has expressed concern over the possibility of control of the Greek natural gas market by Russian energy interests.
A TAIPED manager commented in the local press that "The international creditors of Greece and more specifically the EU wants to speed up the process, although there were indeed voices raised around the possibility of a Russian company emerging as a winner due to skepticism on monopolistic practices. In any case the resolution of the competition issue has been made clear by all participants in the process and the only thing that remains is the price tag involved in order to announce the winner in the coming period."
On the other hand, Greek stakeholders commented that it was disappointing that no significant EU based enitity was willing to commit itself to the process, citing the lack of interest of the Italian Eni and French EDF. Though initially interested, both companies abandoned the competition,which market watchers attribute to the "country risk" involved due to a potential Greek exit from the Eurozone.
"The Russian Premium"
Information from Athens indicate that Russian companies offering a value double than their competitors from Azerbaijan and Greece.
It should be noted that Gazprom and M&M expressed their interests only for DEPA. PPF-GEK and SOCAR only for DESFA, and Sintez-Negusneft for both Greek companies.
Reports indicate that in the first pairing, Gazprom is offering almost 100 percent greater price for DEPA than its direct bid competitor. In the second pairing, SOCAR is reportedly offering a slightly greater price for DESFA.
Sintez has a special place in the competition by expressing its interests for both companies and raising the price tag, although it would be logical to assume that until binding offers are concluded alliances may emerge.
A scenario that would see the Russians acquiring DEPA and the Azeri’s DESFA cannot be excluded, taking into consideration another parameter, which is the outcome of the "Southern Corridor" route, to be decided by March 2013.
Should TAP be selected, SOCAR's interest would be elevated into getting in the Greek market by acquiring the gas network company, while the Russian company could use Greece as an export LNG hub, as previously reported by Natural Gas Europe, an assumption which is based on well-founded and reliable information by European energy market stakeholders.