EU investigation into SOCAR’s purchase of Greek gas firm opens

/AzerNews/

By Gulgiz Dadashova

The European Commission has launched an in-depth investigation to assess whether the proposed acquisition of the Greek gas transmission system operator DESFA by Azerbaijan's state energy company SOCAR meets the EU Merger Regulation.

DESFA owns and operates Greek's sole high-pressure gas transmission and Greece's only LNG terminal and mainly transports gas through its network.

The sale of Greek gas company DEPA and DESFA was considered as one of the key points of the Greek privatization program. SOCAR had offered 400 million euros to secure a majority stake of up to two-thirds in 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.

The Commission aims to ensure that the sale of DESFA does not result in competitive harm and ultimately higher gas prices for consumers in Greece.

The opening of an in-depth inquiry does not prejudge the outcome of the investigation. The Commission should take a decision until 23 March 2015.

SOCAR and the Hellenic Republic Asset Development Fund (HRADF), the company 'Petroleum' signed an agreement last December to acquire 66 percent of shares in DESFA.

SOCAR head Rovnag Abdullayev, earlier said that purchasing DESFA is in line with the existing high-level bilateral relationship between Greece and Azerbaijan as well as SOCAR and the leading energy companies of Greece.

"SOCAR, which has vast experience with natural gas pipeline systems in the Caspian region, is keen to start working in Greece as our first project of this type in the European Union countries," he said, voicing optimism about the future of cooperation.

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.

It owns gas stations in Azerbaijan, Romania, Switzerland, Georgia and Ukraine. It has representative offices in Georgia, Turkey, Romania, Austria, Switzerland, Kazakhstan, Britain, Iran, Germany and Ukraine and trading companies in Switzerland, Singapore, Vietnam, Nigeria, and other countries.