Greece tells Gazprom to lower price of gas or face arbitration
Greece has given Russian energy giant Gazprom a 10-day ultimatum to decide whether it will lower the price of natural gas provided to the Public Gas Corporation (DEPA) to that charged in other European countries or face arbitration.
The chairman and chief executive of DEPA, Haris Sahinis, told Gazprom Export that unless the Russian company can offer a one year retroactive rate closer to the European average of $380 per 1,000 cubic meters, the Greek government will not be able to agree.
The distance between the two sides is not that far as the Russians are reportedly open to a six months retroactive rate of $390 per 1,000 cubic meters.
The Russian side is expected to make its top-level decision within the next 10 days. The existing indications point to an inclination to bringing the rate down to what Greece is asking for, but the one year’s retroactivity appears to be a sticking point.
The word in the market is that arbitration appears inevitable. This would be the preferred solution of the country’s major natural gas consumers – electricity producers and energy-intensive industries – as they pay up to 40 percent more
CEO Mathios Rigas (left) and Energy Minister Yiannis Maniatis sign the contract between the Greek state, Energean and BP Oil International, concerning oil production at Prinos. for the fuel than their rivals elsewhere in Europe.
Meanwhile, British Petroleum yesterday signed an agreement with the Greek state and Greek firm Energean Oil & Gas for the multinational to be the exclusive buyer of the oil output from the Prinos reserves in the northern Aegean for the next six years.
The development has been interpreted as BP’s return to the Greek market in view of expected upcoming developments in the hydrocarbon sector. BP left Greece in 2009, selling its commercial net- work in the fuel market to Hellenic Petroleum.
The way to the signing of the agreement yesterday in Athens was paved by the Energy Ministry’s amendment of the contract between Energean and the Greek state providing for the supply of the oil output to Hellenic Petroleum.
The total value of the deal is estimated at 500 million euros, with the head of Energean stating that it is laying the groundwork for the implementation of the firm’s investment program amounting to 150 million euros and providing for three drillings at Prinos within 2014.