June 2012 Vol. 239 No. 6


Gazprom Bidding For Greek Company

Fourteen companies, including Gazprom and three other Russian firms, are bidding to acquire DEPA and its fully owned subsidiary DESFA, the Greek state-controlled gas transportation systems. Additionally, Gazprom is targeting Greece’s dominant oil company, Hellenic Petroleum, part-owner of DEPA, for possible acquisition.

The starting price of DEPA’s state-owned stake is generally assessed at $1.5 billion. Other bidders include Italian ENI, Italian Edison, Azerbaijan’s State Oil Company, and the Israel Corporation, all with active or potential transit interests in Greece and DEPA/DESFA.

Gazprom is targeting DEPA but not DESFA. This suggests that Gazprom is wary of openly violating European Union legislation which requires ownership separation (unbundling) of supply companies (DEPA) from transportation companies (DESFA). There is a possibility that Moscow is targeting DEPA and DESFA via four different Russian companies, only pretending to comply with EU legislation. Gazprom plans to use DESFA’s pipelines as part of the South Stream project.

Within Greece, DEPA is the national importer of natural gas and wholesale supplier to the internal market, with an estimated 50% market share legally guaranteed until 2036. Gazprom holds the lion’s share of the Greek gas market; it delivered 2.9 Bcm in 2011 to DEPA and directly to end-users through the joint venture Prometheus Gas.
DEPA and DESFA hold monopolies in gas sales and gas transport, respectively. DESFA operates Greece’s gas transmission and distribution pipelines.

Control of DEPA/DESFA would enable Gazprom to promote its own international projects, block rival projects outright, or elbow its way into those rival projects. It would also result in Gazprom’s outright capture of Greece’s gas sector, boost Russia’s already strong economic and political influence in that country, and provide a springboard for Gazprom’s expansion farther afield.

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