The EU executive, the European Commission, announced on November 5 it has opened an “in-depth investigation” into the proposed acquisition of Greek gas grid operator DESFA by Azerbaijan’s state oil company SOCAR. The announcement of the Commission was ready for a long time. It was released, however, two days after the new Commission took over. This is an indication of how the Juncker Commission will deal with the Azerbaijan issue in the future. A few days earlier (October 21), the President oft he European Parliament Martin Schultz, announced that he will immediately send a delegation with representatives of all political groups to Azerbaijan to meet and support Leyla Yunus in her fight for democracy and freedom in her country. The DESFA-SOCAR deal is a tough hit to the Greek government since, while the announcement will bring negative effects in the markets, it will also undermine the stability of the present conservative coalition of New Democracy and PASOK, expediting the change of government in Greece. Indeed, the possibility for Greece loosing € 400 million, if the Commission cancels the deal (which is implied by the way today’s announcement was phrased), will help SYRIZA opposition under Alexis Tsipras to win the next election. The apparent political decision of certain quarters of the European Commission, to scarify of the stability and the economy of a Member State seems aimed at further isolating Azerbaijan from Europe. At the moment, such an isolation seems to be the political will of Baku as well as an easy way to postpone criticism for human rights violations. However, this is what Europeans want as well but it seems this is not the final aim of Europe. In December 2013, Greece agreed to sell DESFA shares to SOCAR for €400 million as part of the Greek government privatisation programme with a view to modernise and liberalise the energy markets. The Azeri energy major was the only bidder for a 66% stake in DESFA in a tender. SOCAR’s activities include the production of natural gas and the upstream wholesale sale of gas in Greece in the context of the Southern Gas Corridor. DESFA owns and operates Greek’s sole high-pressure gas transmission and Greece’s only LNG terminal in Revithoussa and mainly transports gas through its network. “The Commission 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 said in a statement. The Commission said it wants to ensure that the sale of DESFA does not result in competitive harm and ultimately higher gas prices for consumers in Greece. November 5 had been the initial deadline for the Commission to take a decision on whether the deal complied with the EU’s competition rules. Under the new European Competition Commissioner Margrethe Vestager, the Commission now has 90 working days, until March 23, 2015, to take a decision. The Commission’s initial market investigation indicated that the merging of SOCAR with DESFA could restrict its competitors’ access to the Greek gas transmission network by strategically limiting investments in future expansions of the import capacity including an expansion of the LNG Terminal and an interconnection between the Trans Adriatic Pipeline (TAP) and DESFA’s network. In addition, the merged entity could restrict inflows of gas into Greece by managing the gas transmission network in a discriminatory way favouring SOCAR’s supplies over its competitors. When talks about a merger between SOCAR and DESFA begun, the EU welcomed the news, arguing it was linked to the planned TAP project as a key instrument for diversifying EU energy supplies and decreasing Europe’s dependency on Russian gas. It also reduced the possibility of DESFA falling into Russian hands.
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