Page 8 - MEOG Week 03

MEOG PIPeLInes & transPort MEOG
Greek gas importer wins legal dispute with Turkish supplier
east meD
GREEK gas utility DEPA has claimed victory in an arbitration case against Turkish counterpart BOTAS over gas supplies, drawing a line under a decade-long dispute.
The International Court of Arbitration (ICC) in Paris ruled last week that BOTAS should ret- roactively cut the contractual price it charged DEPA for gas, the Greek firm said in a statement.
“This decision is the final step in a 10-year trade dispute,” DEPA said, without revealing details of the verdict. The company said it was currently assessing the impact of the legal win.
BOTAS supplies DEPA with around 0.7- 0.9bn cubic metres per year of gas it buys from Azerbaijan, under a long-term contract reached in 2003. It opened a case against the Greek firm at the ICC in 2009, demanding that it pay €300mn ($332mn) for reportedly failing to meet its take- or-pay commitment. A take-or-pay clause in a supply contract requires a buyer to pay for gas supplies regardless of whether it takes them or not, or face a fine.
The ICC subsequently issued a €180mn award to BOTAS. But DEPA later lodged its own claims, over what it described as unfair pricing
since 2011. The verdict last week will see BOTAS retroactively apply a price cut from this year, a source told Reuters.
While details have not been disclosed, even a modest price revision would mean BOTAS fork- ing out tens of millions of euros in compensation to DEPA.
The award comes at a fortunate time for Greece, which has recently broken up DEPA and is preparing to sell off a majority stake in its wholesale and retail activities this month. The government has also launched a tender for 100% of its distribution network.
DEPA also has long-term contracts for gas supply with Russia’s Gazprom and Algeria’s Sonatrach. It is currently in talks with Gaz- prom to remove the take-or-pay clause in their contract, while also seeking a price reduction from Sonatrach for LNG. DEPA’s contract with BOTAS is due to expire in 2021, after which point it plans to buy gas directly from Azerbaijan via the nearly-completed Southern Gas Corridor (SGC) network. The country is also building a second LNG import terminal to diversify its sup- ply even further.™
FInanCe & InVestment
Aramco expands scope of IPO via over-allotment option
sauDI arabIa
SAUDI Arabia’s national oil company (NOC) Saudi Aramco revealed at the weekend that it had exercised its right to add additional shares to its initial public offering (IPO).
In a statement dated January 12, the com- pany said it had utilised this “greenshoe option,” also known as over-allotment, to offer another 450mn shares within the framework of the IPO programme. This should raise the total value of the issue, which was launched in December, from $25.6bn to $29.4bn, the highest figure ever reported for an IPO.
Saudi Aramco launched the IPO in Decem- ber, floating some 3bn shares on the Tadawul exchange in Riyadh for a starting price of SAR32 ($8.53) apiece.
It will not be selling the additional shares on the open market; rather, it has reserved them for
investors involved in the book-building process. “No additional shares are being offered into the market today, and the stabilising manager will not hold any shares in the company as a result of exercise of the over-allotment option,”
the company said in its statement.
The NOC also noted that Goldman Sachs,
the US-based investment banking and financial services firm, had already released the proceeds of the over-allotment sales to Riyadh during the weekend. Goldman Sachs had been tasked with holding the additional shares during the first month of public trading in Saudi Aramco’s stock.
show me the money
In related news, Reuters reported earlier this week that the banks that helped the Saudi com- pany co-ordinate its IPO had begun lobbying
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w w w. N E W S B A S E . c o m Week 03 22•January•2020