Azernews.Az

By Gulgiz Dadashova

Azerbaijan’s state energy company SOCAR has voiced a hope that the decision of the European Commission towards DESFA will bring positive results.

The deadline for reviewing the deal on purchasing 66 percent of share in Greek DESFA gas transmission system operator by SOCAR, has been suspended, Reuters reported on February 4. The deadline was suspended on January 21, according to Reuters’ information.

SOCAR announced that it has been working closely with the European Commission to develop a mutually acceptable solution to address the specific concerns identified by the EC in its preliminary assessment of the proposed acquisition of DESFA.

“The European Commission has “stopped the clock” on its formal review period, which will allow more time for the reaching of such a mutually acceptable solution, as well as for its review,” the message reads.

“Such a “time out” from the formal review period is not uncommon in EU merger cases. SOCAR continues to be encouraged by the progress that has been made to date in connection with the regulatory progress.”

The transaction is still subject to the EC approval.

European media outlets reported on Nov. 6, 2014, that EU’s antimonopoly authority started a check-up of the impending deal on SOCAR’s purchase of DESFA.

The Commission reported that it has concerns that the transaction may reduce competition on the upstream wholesale supply market for natural gas in Greece because it could allow the merged entity to hinder SOCAR's competitors in accessing the Greek gas transmission network.

Given the prospects of SOCAR’s owning DESFA for Greek economy, Europe’s decision caused a lot of questions about the true intention of the EC, as the transaction itself, and the entrance to the Greek market means serious investment in the economy of the country that the crisis almost killed .

DESFA owns and operates Greek's sole high-pressure gas transmission and Greece's only LNG terminal and mainly transports gas through its network. Greece has positioned the sale of DESFA as one of the key points of the Greek privatization program. Azerbaijan's energy giant had offered 400 million euros to secure a majority stake of up to two-thirds in DESFA.

SOCAR and the Hellenic Republic Asset Development Fund (HRADF), the company 'Petroleum' signed an agreement in December 2013.

SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.

The company annually invests billions of dollars in transport infrastructure and is involved in key projects designed to increase Europe's energy security.

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