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SOCAR extends DESFA's letter of guarantee

28 September 2016 11:14 (UTC+04:00)
SOCAR extends DESFA's letter of guarantee

By Nigar Abbasova

Azerbaijan’s state energy giant SOCAR has agreed to extend a term of a letter of guarantee under the tender on the acquisition of a share in the Greek gas network operator DESFA. The term was extended till October 31, 2016. The document was due to expire on September 23.

Head of SOCAR, Rovnag Abdullayev met with Greek Prime Minister Alexis Tsipras where the sides discussed the issue.

Greek PM, addressing the meeting, which took place in a positive atmosphere, said that his country is ready to take all necessary measures to allow SOCAR to enter the Greek market, mentioning that Azerbaijan is a strategic partner of Greece, while SOCAR is a strategic investor-company.

SOCAR took a decision to create a working group for the privatization of DESFA with a view to find a solution to a crisis.

The working group will be headed by SOCAR’s Vice President Elshad Nasirov and Dmitrios Liakos, the economic adviser to the Greek PM.

Moreover, the working group will also closely cooperate with Italy’s Snam and European Commission and will look for a way to privatize DESFA within a month.

SOCAR had previously said it would only go ahead with the deal should the cost was cut significantly given that a number of obstacles had emerged since it first agreed to buy DESFA in 2013.

Italian gas grid operator Snam is still interested in buying the 17 percent DESFA stake that SOCAR has to sell to satisfy EU conditions.

SOCAR won a tender in 2013 on the purchase of a 66-percent stake in DESFA for 400 million euros ($446.3 million) but the acquisition was stalled, when SOCAR faced EU’s anti-trust concerns and was ordered to sell 17 percent of DESFA to a third party, so that its stake drops to 49 percent and satisfy EU competition authorities. Greece passed a law in July which raised DESFA's gas tariffs, further complicating the sale.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

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