SOCAR-DESFA Sale and Purchase Agreement signed in Athens

The President of SOCAR R.Abdullayev and Greek signatories, Hellenic Petroleum and the state privatization fund (HRADF) signed on December 21 Sale and Purchase Agreement (SPA) in a move, which is considered to be the first major step in the acquisition of a 66% stake in Greece’s natural gas transmission network operator DESFA. The sale of the controlling stake in DESFA will bring to the budget of Greece 400 million euros.

The ceremony, held at the King George Hotel, took place in the presence of Energy Minister Y. Maniatis and his deputy, A. Papageorgiou, high representatives of the government, MFA, Greek companies and mass media. In the framework of the working visit to sign the deal, R. Abdullayev had a meeting with Greek Prime Minister A. Samaras at the PM’s office.

The completion of the agreement is still pending the approval of European Union regulatory authorities, which is expected to be secured till the end of June 2014.

During the signing ceremony the Head of SOCAR R.Abdullayev made the following statement:

Dear Mr. Minister,

Excellencies,

Ladies and Gentlemen,

Dear friends,

When I was a child, learning history in school, I was fascinated by the legend of Prometheus, who defied the Gods by giving fire to people and was bound to a rock in the mountains of the Caucasus. I don’t think it is a coincidence that many years after that, the first industrial well in the world was drilled in 1848 in Baku, to the south of the Caucasus mountains, giving birth to hydrocarbon civilization, civilization of energy. By the beginning of the 20th century, Baku was providing half of the world’s oil production, which was possible only in smooth cooperation with many European companies including the Nobel brothers. We are proud of fact that been able to contribute to the creation of Nobel Prize fund.
Today, in the land of Prometheus and Olympic fire, we are celebrating this historic link between Greece and the Caucasus by bringing back energy to the place where the Gods created it.

Several days ago, in Baku, we signed the Final Investment Decision to go ahead with the world’s most ambitious, complex and challenging energy project, the Shah Deniz 2. The gas produced from the project, for the first time will be delivered from the landlocked Azerbaijan to the heart of Europe, bringing energy to the cities of the Southern Gas corridor.

This will enable to diversify gas supplies to the European Union, enhancing its energy security. The creation of Southern Gas Corridor undoubtedly will have crucial importance for Europe since it will connect the European consumption with the gas-rich Caspian. Moreover, the pipeline connecting the Caspian with Europe is expandable and scalable to the volumes of twice of its initial capacity will be able to transport not only the Caspian gas, but from new emerging sources of gas production.

A project of this scope and complexity couldn’t be implemented without close cooperation with European Union and its member states. Less than 3 years ago in January 2011 President Barroso and President Aliyev signed the Joint Declaration on the Southern Gas Corridor naming Azerbaijan as substantial contributor and enabler of Southern Gas Corridor.

This projects needs courage. The overall length of pipelines will be more than 3500 km which will deliver gas volumes to 7 countries. This will create tens of thousands of jobs in these countries over the construction as well as operation period. The EC is already prioritising support for interconnecting pipelines to assist in the development of the gas networks in Southern and South Eastern Europe. And our firm intention is to continue to progress Azerbaijan’s other gas projects which can follow Shah Deniz, and therefore provide additional gas to Europe. Currently Azerbaijan has proven reserves of over 3 trillion cubic meters considering our other fields expected to come under operation during this decade. Azerbaijan is committed to continue its position as a reliable natural gas supplier to our European partners.

Investments in gas related infrastructure projects are an important part of SOCAR’s strategy in the Balkans. Our participation in DESFA is a first step for us towards the implementation of this strategy. We consider the selection of SOCAR as a partner for this project by the Greek government as an indication of support and belief in our vision and ability to contribute to the further development of the country. In course of the whole process we always felt welcomed by the Greek authorities which confirms and serves as a sign of approval of our strategy in Balkans. This encourages us to continue our engagement with this region with further investments.

One of the integral and most important parts of Southern gas corridor is the construction of Trans Adriatic Pipeline (TAP). Greece will be the home for more than 500 km part of it. The investments to be made in Greece through investments in infrastructure, involvement of the Greek companies to the construction process can enable the creation of thousands of new jobs for Greek citizens, thus contributing to the ongoing economic recovery. Moreover, we believe that there are ample opportunities for the involvement of Greek construction companies will not be limited only to Greek territory. With the plans to the expand the pipeline to the North of Greece to the Balkan for transpiration of additional gas from Azerbaijan beyond the Shah Deniz indicates that the expertise of Greek construction companies may be used in the new gas markets.

Dear Mr. Minister,

As I mentioned the success of energy industry of Azerbaijan wouldn’t be possible without a smooth cooperation with different companies. Today we are starting a new era of cooperation with Greece and Greek companies for the good of two nations. We are proud and honoured to be chosen as your strategic partner.