09:38 11.01.2013

Gazprom, Sintez emerge as main contenders for DEPA, presenting Greece with dilemma - FT

2 min read

Two Russian companies, Gazprom and Sintez, lead the contender pack in the privatization of Greek state gas company DEPA, which presents the country's authorities with a difficult choice, The Financial Times writes.

The likelihood of Russian companies purchasing DEPA has prompted cautions from the European Union and United States over the opening of the Greek market to Russian gas interests, the paper reports. However, Athens faces the necessity of carrying out its privatization plans, which have been worked out with international creditors.

"It begs the question - what if the Russians make us an offer we can't refuse?" a senior Greek official said. "We are under pressure from the troika [the European Commission, European Central Bank and International Monetary Fund] to raise as much money as we can from privatization."

"The board of Taiped, the privatization agency, has twice postponed a decision on shortlisting final bidders for DEPA, the gas trading company, and its subsidiary DESFA, the grid operator, while at the same time insisting a deal can be wrapped up by the end of March," the paper writes.

"Yet no European, Japanese or Chinese natural gas operators approved by Taiped as potential buyers came up with a financial offer, highlighting the concerns of many international investors about a possible "Grexit" from the Eurozone," the FT reports.

None of the European, Japanese, or Chinese contenders have yet made a financial offer for the state company. Three other outfits involved in the bidding - State Oil Company of the Azerbaijani Republic (SOCAR), the Greek company M&M GasCo (a Mytilneos-Motor Oil joint venture), and Greece's GEK Terna, are looking only to buy DESPA.

Taiped, as far as can be judged, has "shrugged off" a U.S. State Department warning that Greece's sources of gas have to be diversified so that it "can't be held hostage."

"We are going ahead with the privatization process with the understanding that whoever buys DEPA will be operating in an EU market and will be obliged to comply fully with EU legislation," one official said.

Gazprom supplies Greece with 90% of its gas, while SOCAR sends the country small amounts through Turkey.

As per the terms of two foreign aide programs, Greece is obliged to raise some EUR 19 billion before 2015 with the privatization of state assets.