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How will Greek election impact Azerbaijan’s TAP project ?

Oil&Gas Materials 22 September 2015 22:00 (UTC +04:00)
The second parliamentary election in Greece during the year was a repetition of the first one held in January. The radical left party won again.
How will Greek election impact Azerbaijan’s TAP project ?

Baku, Azerbaijan, Sept. 22

By Maksim Tsurkov - Trend:

The second parliamentary election in Greece during the year was a repetition of the first one held in January. The radical left party won again. The Syriza party led by Alexis Tsipras has won more than 35 percent of votes and will form a coalition with the Independent Greeks party.

The second appearance of the radical left party, however, may greatly differ from the first one. In particular, this concerns the economy and energy projects, including the main point of contact between Greece and Azerbaijan. Therefore, the main question arises. What should be expected from the Greek election towards the Azerbaijani energy projects?

Syriza came to power using enthusiasm, big promises and slogans in January. Moreover, the new government tried to maneuver and conduct rather uncertain policy towards the main Azerbaijani energy projects in Greece. Among them are the construction of the Trans Adriatic Pipeline (TAP) and the deal on acquisition of the Greek gas operator DESFA's 66 percent stake by SOCAR (State Oil Company of Azerbaijan).

As far as TAP was concerned, Greeks either hinted at getting a greater deal of dividends, or at giving their preference to Russian project Turkish Stream.

And with regard to the DESFA deal, they attempted to revise the existing agreements and to cut the share to be acquired by SOCAR to 49 percent.

However, in both cases, the attempt to put pressure on Azerbaijan ended in failure, and Tsipras certainly learned some lesson from this.

Moreover, as of now the new government's policy is in fact predetermined by the terms of Greece's agreement reached with its creditors as part of the third emergency financial assistance package, and therefore the Greeks won't have any space to manoeuvre.

The talks on the Turkish Stream have been temporarily halted, at a time when the works are already actively going on for TAP and contracts are being signed on it.

So far this makes TAP the sole real option for Greece to play a role in gas supplies to Europe that would be an alternative to Russian gas deliveries.

And such a role could bring economic well-being and a certain political weight to Greece.

As for the DESFA deal, Greece in fact doesn't play any role here. Currently, the deal is being considered by European Commission's Directorate-General for Competition and only this structure can adopt a decision on it.

Moreover, as SOCAR President Rovnag Abdullayev said, the company counts on purchasing namely the 66-percent share, that's to say, the share on which a tender was held and Azerbaijan became winner.

Meanwhile, Abdullayev said that the talks on this issue have been frozen till the parliamentary election in Greece. So in fact, this is the second chance for Tsipras government not to disgrace itself in the issue of talks on privatization of the gas operator that is so important for the Athens.

In general, in this situation, Azerbaijani projects are an important strategic asset for Greece, since it can contribute to the country's further economic growth. The only thing that the Greek government will need is to take this opportunity.

Edited by CN

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Follow the author on Twitter: @MaksimTsurkov

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