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energyworld No 15 | November-December 2016

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Oil & Gas • Electricity • Renewables • Environment

www.energyworldmag.com

PUBLIC ENERGY COMPANIES FOR SALE IN SE EUROPE

Nov.-Dec. 2016 Price: 5 Euros

CYPRUS: REGIONAL SYNERGIES WITH GREECE-EAST MED ROMANIAN GAS ON THE STOCK EXCHANGE THE COOPERATION OF DEPA - SONATRACH BROADENS


Code: 210062

Founder & Managing Director Apostolos Komnos Email: komnos@trimpublications.com Publishing Assistant Dragos Zaharia

Editor in Chief Yiannis Pispirigos Editors & Contributors Emilia Damian Ada Gavrilescu Nikolay Jekov Ilin Stanev Kostadin Sirlestov Stevan Veljovic Vladimir Spasic Lorenc Gordani Kostas Voutsadakis Penelope Mitroulia Christoforos Filippidis Ian Becker Solon Kassinis Dr Yannis Kelemenis Vassilis Oikonomou Nikos Drakopoulos Art Director Anastasia Komnou Email: info@anastasiakomnou.com Atelier Sophia Sofikiti

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The english edition for SE Europe & Eastern Mediterranean Issue No 15 November - December 2016 ISSUE PRICE 5 Euros


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THE COOPERATION OF DEPA - SONATRACH BROADENS

TRAPS IN CHANGING AN ENERGY SUPPLIER

GREEK PPC AGREES NEW TARIFFS WITH ALUMINIUM

EPS PRIVATIZATION: A POLITICAL DECISION

RESTRUCTURING AND SERIOUS REFORMS FOR SERBIA’S EPS

UTILITY SECTOR IN BULGARIA – NOT FOR PRIVATIZATION

IN THE FINAL STRAIGHT FOR ADMIE AND DESFA DEALS

ROMANIA’S FONDUL PROPRIETATEA SELLS 6.4% STAKE IN OMV PETROM

HIDROELECTRICA, THE BEST ROMANIAN LISTING ON STOCK EXCHANGE

NEWS IN BRIEF

EDITORIAL

Contents

01 02 03 04 05 06 07 08 09 10 11


ENERGY DIRECTORY

ENERGY TRADING, TREND OF TODAY POWER OF TOMORROW

ENERGY TRANSACTIONS SCHEME ON FORWARD ELECTRICITY PRODUCTS

ROMANIAN GAS ON THE STOCK EXCHANGE

OIL & GAS SECTOR RELEASES MID YEAR FIGURES

GREECE: NO CHECKS IN FUEL SMUGGLING

COMPRESSED NATURAL GAS IN GREECE & THE WORLD

THE PRIVATIZATION OF THE BELENE NUCLEAR POWER PLANT

5.000 MW OF GREEN ENERGY IN ROMANIA

CYPRUS: REGIONAL SYNERGIES WITH GREECE-EAST MED

ROMANIA AND BULGARIA GAS CONNECTED

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12 13 14 15 16 17 18 19 20 21 22


Editorial

01 4

A BUMPY ROAD FOR ENERGY PRIVATIZATIONS

The energy sector of Southeastern Europe is undergoing a dramatic transformation. New technologies and new regulations in nearly every subsector are straining yesterday’s business models. Foundational elements throughout the industry, including energy transfer and storage, have seen massive disruption. At the same time, price fluctuations, volatile consumer demand and security concerns continue to add to an unpredictable future. Taking in to consideration this fragile economic and business environment, “EnergyWorld” magazine presents the most crucial cases of energy privatizations in Southeastern Europe. The protagonists, the history, the opportunities and the obstacles… In Romania, the State will put up for sale shares in the Oltenia Energy Complex, Hidroelectrica, Airports National Company Bucharest, Constanta and Salrom CNAPM, but will remain the majority shareholder in these companies. Also, Fondul Proprietatea, the largest investment fund in Romania, will sell part of its stake in the oil and gas group OMV Petrom, aiming at enhancing the trading liquidity of OMV Petrom’s shares while remaining committed as a long term core shareholder. In Greece, the government is fighting against time, regarding the privatization of the Independent Power Transmission Operator (ADMIE). Two binding offers were ultimately

submitted for the acquisition of 24% of the share capital of ADMIE from the Chinese State Grid and Italian Terna, but until early November the selection of the preferred investor must be completed otherwise the 100% sale of ADMIE will proceed – an unwanted choice for the Greek State. In Bulgaria, the status quo in the utility/energy sector will remain. This of course means no change at all. Some privately and some state owned utilities are ready to experiment with the external management of their activities. The state might decide to sell part of its shares in the energy companies when they improve their financial results. In Serbia, regarding the privatization of EPS, the country’s power utility, the possibility of introducing a minority partner cannot be excluded, even though the Serbian government has so far denied the possibility of the company’s privatization. Ergo the energy sector is waiting for the structural reforming and financial consolidation of EPS. In conclusion, the energy privatizations in Eastern Europe, despite the differences between the countries, have one thing in common: both the energy market and the governments wish to unlock and exploit the benefits of privatization while maintaining balances within their countries.


News in brief

02 6

IEA: Five-year renewable growth forecast

Gazprom plans to maintain LNG exports in 2016 Russia’s major gas producer Gazprom plans to keep its liquefied natural gas (LNG) exports at last year’s level of 3.56 mln tonnes in 2016, Deputy Chairman Alexander Medvedev said in an interview with the corporate magazine Gazprom. “We expect the volume of our LNG supplies in 2016 to be in line with last year’s. In 2015, Gazprom Group supplied 3.56 mln tonnes of liquefied natural gas. As the competition on the LNG market keeps rising, we’re ready to operate in the new market environment. We are boosting cooperation with our traditional partners in Japan, Korea, Taiwan, as well as buyers from the fast-growing markets of Southeast Asia, Middle East and other regions”, he said.

The International Energy Agency stated in late October that it was significantly increasing its five-year growth forecast for renewables thanks to strong policy support in key countries and sharp cost reductions. Renewables have surpassed coal last year to become the largest source of installed power capacity in the world. The latest edition of the IEA’s Medium-Term Renewable Market Report now sees renewables growing 13% more between 2015 and 2021 than it did in last year’s forecast, due mostly to stronger policy backing in the United States, China, India and Mexico. Over the forecast period, costs are expected to drop by a quarter in solar PV and 15 percent for onshore wind. Last year marked a turning point for renewables. Led by wind and solar, renewables represented more than half of the new power capacity globally, reaching a record of 153 Gigawatt (GW), 15% more than the previous year. Most of these gains were driven by record-level wind additions of 66 GW and solar PV additions of 49 GW. About half a million solar panels were installed per day around the world last year. In China, which accounted for about half of the wind additions and 40% of all renewable capacity increases, two wind turbines were installed every hour in 2015. “We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets”, said Dr Fatih Birol, the IEA’s executive director. There are many factors behind this remarkable achievement: more competition, enhanced policy support in key markets, and technology improvements. While climate change mitigation is a powerful driver for renewables, it is not the only one. In many countries, cutting deadly air pollution and diversifying energy supplies to improve energy security play an equally strong role in growing low-carbon energy sources, especially in emerging Asia. Over the next five years, renewables will remain the fastest-growing source of electricity generation, with their share growing to 28% in 2021 from 23% in 2015. Renewables are expected to cover more than 60% of the increase in world electricity generation over the medium term, rapidly closing the gap with coal. Generation from renewables is expected to exceed 7,600 TWh by 2021 equivalent to the total electricity generation of the United States and the European Union put together today.


Russia, OPEC study mechanisms for stabilizing oil production Russia and OPEC countries are studying various mechanisms to stabilize oil production volumes, Russian Energy Minister Alexander Novak said at a press conference in the framework of the “Energy DialogRussia-OPEC” meeting. “We are working on various options and mechanisms for OPEC and non-OPEC countries. Now a more detailed study of specific proposals within the OPEC is in progress. The proposals will be discussed in November at the next conference”, the minister said. Russia considers an option of either freezing or reducing oil production in terms of acting together with the OPEC, Novak said. “We are viewing different options”, the minister said responding to a question whether Russia is ready to reduce oil production instead of freezing it. Different scenarios exist and “are undergoing estimation” in terms of discussed parameters and mechanisms, Novak said. “As for the parameters and mechanisms we are discussing - there are different scenarios and calculations that are being made. Not only for OPEC and Russia, the entire volume of production and demand is being discussed in order to come up with as precise forecasts as possible”, he said. Russia has not yet made a final decision on the way of stabilizing oil production through reduction or freezing, Novak said earlier. According to him, the energy dialogue is a traditional format for discussing other issues that do not concern freezing oil production and market coordination. It includes analysis, monitoring of the situation in the world oil markets, exchanging the best practices in taxation, modern technologies. The OPEC countries managed earlier to agree upon the oil production limit of 32.5-33 mln barrels daily at the informal meeting in Algeria on September 28th.

Europe: 400 companies call for the end of trade measures on solar products Over 400 European companies covering all EU Member States sent a letter to the European Trade Commissioner Cecilia Malmstrom, asking her to end the trade measures in place since 2012 on Chinese solar modules and cells. Jochen Hauff, Board Director of SolarPower Europe representing BayWa r.e. renewable energy GmbH, one of the leaders of the initiative, stated: “The volume of the European companies opposed to the trade measures is staggering. Companies from every EU Member State, from all segments of the value chain – including: steel, chemicals, engineering, developers, installers, power sales have signed. European solar SMEs and large corporations are united in the belief that these trade duties must go, and now is the time for the Commission to act and remove them through the ongoing Expiry Review”. Representing European manufacturing, Christian Westermeier, Board Director of SolarPower Europe, added: “For the European manufacturers in the solar value chain, the measures have been ruinous and have led to the loss of thousands of jobs in manufacturing. The removal of these trade measures will stimulate growth in European manufacturing all along the solar value chain and support the process of regaining this lost European employment”. The case represents the largest ever trade dispute between the EU and China and seriously impacts the possibility for Europe to reach its climate objectives. The Expiry Review into the trade duties placed on solar modules and cells originating in China is currently ongoing and due to be completed by March 2017.

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Privatizations in Romania Emilia Damian

03 8

HIDROELECTRICA, THE BEST ROMANIAN LISTING ON STOCK EXCHANGE The Romanian government wants to list the largest electricity producer, Hidroelectrica on the stock exchange. According to the Romanian Energy minister, before the listing process, a number of technical issues should be clarified.

The listing of Hidroelectrica could take place within six months and may be one of the most lucrative listings that the Romanian state has ever done, according to the Energy Minister Victor Grigorescu, stressing however that would not want to speculate regarding the term. «It’s hard to set a deadline for the listing, because apart from the technical element, we have to analyze the conjuncture of the market. I believe that this listing will likely occur within 6 months, but I would not want to speculate, because we must choose the best time on the market”, said the head of Energy, when asked which is the deadline for the listing of this company. According to Grigorescu, before the listing process a number of technical issues should be clarified. He assured that work is under way “with engines turned on at several committees and technical committees”.

Technical issues to be resolved “Listing Hidroelectrica is probably one of the most important actions we make

in this mandate. We have committed to take this process forward and I can say that if this process will be completed during this term, I have faith that we can do the listing itself. There is an amount of technical issues to be resolved beforehand and we are doing a great effort right now. We have to clarify and finalize the strategy for the development of Hidroelectrica. The listing should have one goal: to make this company a stronger company and a company that can play a greater role at both a national and regional level”, Grigorescu said. He mentioned that Hidroelectrica will end this year with a record production. “And that, of course, comes as a result of the restructuring and modernization”, the official added. Grigorescu refused to tell journalists how much money Hidroelectrica should raise, in order to consider the process to be a success. “It would be inappropriate for me to comment on anything related to the price, because it is inside information and maybe one of the most sensitive pieces of information during the listing process. What I can say is that I am


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It’s hard to set a deadline for the listing, because apart from the technical element, we have to analyze the conjuncture of the market. I believe that this listing will likely happen within 6 months, but I would not want to speculate, because we must choose the best time on the market - Victor Grigorescu, the Romanian Energy Minister

convinced that Hidroelectrica may be one of the most lucrative listings that the Romanian state has ever made”, the minister also said.

At the middle of the next year

In early September, Ovidiu Agliceru, the CEO of Hidroelectrica, said that the listing of Hidroelectrica could be carried out by the middle of next year. “Compared to the existing program, the listing of Hidroelectrica will be somewhere in the middle of next year, this is the time where we have to relate”, said Agliceru, in a press conference. He argued that the listing may be possible only after the company completes the studies for 17 investment works that started before 1989 and were never completed. The listing of the Romanian power producer Hidroelectrica on the Bucharest Stock Exchange could be the largest such transaction in Romania’s history as well as the largest initial public offering (IPO) in Central and Eastern Europe this year, said Greg Konieczny, vice-president of Templeton Emerging Markets Group and portfolio manager of the local investment fund Fondul Proprietatea. Fondul has 20% of Hidroelectrica. This listing could generate a real change on the Bucharest Stock Exchange (BVB) and the local capital market, he added. It could improve liquidity and contribute to attracting more investors.

Lucian Anghel, BVB board chairman, also said that Hidroelectrica should list 20-22% of its shares, and not 15% as previously decided by the government. Fondul Proprietatea may also sell some of its shares in the company.

The privatization program

The Romanian state will put up shares for sale in Oltenia Energy Complex, Hidroelectrica, Airports National Company Bucharest, Constanta and Salrom CNAPM, but will remain the majority shareholder in these companies considered strategic, according to a memorandum published by the Executive. Proceeds of the sale of shares will remain at the disposal of companies and will be used to finance investment programs. In 2014, Hidroelectrica became insolvent again due to litigations with some of its former clients. The company has cancelled the damaging contracts that led to its insolvency. Hidroelectrica went out of insolvency in June 2016.


Privatizations in Romania Ada Gavrilescu

04 10

ROMANIA’S FONDUL PROPRIETATEA SELLS 6.4% STAKE IN OMV PETROM Fondul Proprietatea, the largest investment fund in Romania, will sell part of its stake in the OMV Petrom oil and gas group via a secondary public offering on the Bucharest Stock Exchange and the London Stock Exchange.

The Romanian investment fund Fondul Proprietatea will sell a 6.4% stake in the OMV Petrom oil and gas group for a maximum 200 million Euros, the fund announced at the beginning of October.

has strongly impacted the group’s profitability. OMV Petrom is currently valued at approximately 3.2 billion Euros and Fondul Proprietatea’s 19% stake is worth over 600 million Euros.

The secondary public offering (SPO) will take place at the same time on the Bucharest Stock Exchange and London Stock Exchange. After the offer is finalized, OMV Petrom will become the third Romanian company traded on the London Stock Exchange, after the gas producer Romgaz and the electricity distributor Electrica.

“The Fund is to proceed with a sale of part of its interest in OMV Petrom through a public offering of both shares and GDRs. The offering will consist of the Fund’s owned shares only. The company will not raise new capital in connection with the public offering and will not receive any of the proceeds from it”, Fondul Proprietatea’s manager Franklin Templeton announced.

The most valuable company in Romania Interested investors will have the option to buy OMV Petrom shares, which are traded on the Bucharest Stock Exchange (BVB), or global depository receipts (GDRs) which are traded on the London Stock Exchange. OMV Petrom, which has been the most valuable company in Romania for many years, has seen its shares drop by almost 50% in the last two years, as the decline in international oil prices

In Romania, the offering will be available to both institutional and retail investors, while the global depository receipts (GDRs) sold in London will be offered to foreign institutionals. American group Goldman Sachs is the Sole Global Coordinator of the offering with Romanian BCR, Austrian Erste Bank, and Czech brokerage house Wood acting as Joint Bookrunners. With this partial exit, Fondul Proprietatea


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aims to enhance the trading liquidity of OMV Petrom’s shares while remaining committed as a long term core shareholder to its successful development, the fund manager added. Fondul Proprietatea hasn’t announced exactly how many of its shares it plans to sell.

Bucharest Stock Exchange and London Stock Exchange Fondul Proprietatea first announced its intention to sell a significant part of its holding in OMV Petrom in March 2014. In September 2015, OMV Petrom’s shareholders approved the company’s secondary listing on the London Stock Exchange. The two decisions are connected, as Fondul Proprietatea’s manager believes that selling its shares both on the Bucharest Stock Exchange and London Stock Exchange would increase its chances of finalizing this offer. However, the secondary listing has been delayed so far because of the low share price. In July 2011, the Romanian state failed to sell a 9.84% stake in OMV Petrom on the Bucharest Stock Exchange. At that

time, the company’s shares were trading at 0.46 lei almost double compared to the current price (0.2485 lei, on September 23, 2016). The state holds 20.64% of the group’s shares and also considers selling some of its shares at some point. The European Bank for Reconstruction and Development (EBRD) sold its 2.4% stake in Petrom via two private placements on the Bucharest Stock Exchange in 2012 and 2013. The financial institution got over 105 million Εuros from the two deals. Fondul Proprietatea also sold a 1.11% stake in OMV Petrom for 57 million Εuros, in May 2013. The price Fondul Proprietatea got for those shares was 0.39 lei, over 50% higher than the current market price. OMV Petrom is the largest integrated oil and gas group in South-Eastern Europe, with an annual oil and gas production of approximately 65 million boe (barrels of oil equivalent) in 2015. The group has a refining capacity of 4.5 million tons per year at its Petrobrazi refinery near Ploiesti and operates an 860 MW high efficiency power plant and a 45 MW

wind park. The group is present on the oil products retail markets in Romania and neighboring countries through 784 filling stations. In the first six months of 2016, OMV Petrom had consolidated revenues of 1.6 billion Euros, 18% lower than in the same period of 2015, and a net profit of 90 million Εuros, down 60% compared to H1 2015. Austrian group OMV owns 51% of OMV Petrom’s shares, the Romanian state has a 20.64% stake, and Fondul Proprietatea controls 19%, with the remaining 9.36% held by investors on the Bucharest Stock Exchange.


Privatizations in Greece Yiannis Pispirigos

05 12

IN THE FINAL STRAIGHT FOR ADMIE AND DESFA DEALS Two binding offers were ultimately submitted for the acquisition of 24% of the share capital of the Independent Power Transmission Operator (ADMIE) from the Chinese State Grid and Italian Terna, while the French from RTE were not involved in the process, despite the rumors. At the same time, most of the problems relating to the privatization of the Hellenic Gas Transmission System Operator (DESFA) seem to have been overcome, and what remains is the arrangement of specific details before being given the final “green light” for the sale of 66% of the Operator to the Azerbaijani Socar and the Italian Snam.

The tenders for the Independent Power Transmission Operator were submitted to a special committee set up by decision of the board of the Public Power Corporation (PPC), the head of which is the president and CEO of the company Mr. Manolis Panagiotakis. The verification of legal documents and the opening of the financial envelopes will follow and is to be held in early November. Meanwhile, according to “EnergyWorld” information, both offers are valid and the leadership of the Ministry of Environment and Energy is satisfied with the development of the discussions. A leading agent of the Ministry of Energy, indeed, stated to “EnergyWorld” that the evolution of the competition proves that there is an alternative route to the privatizations. As noted, it is not necessary for the State to lose control of the electricity networks in order to attract investor interest. At this point it is worth noting that the completion of the sale of ADMIE is one of the basic prerequisites of the agreement with the lenders of Greece,

with the schedule providing that until early November the selection of the preferred investor must be completed otherwise the 100% sale of ADMIE will proceed.

Expectations for a “good” price

While the committee set up by PPC is examining the offerings of State Grid and Terna, the PPC consultant for the sale, HSBC, conducted a evaluation study of the value of ADMIE, in order to create a basis of the price evaluation. PPC expects a “good” price for the 24% of ADMIE as it faces a very difficult economic situation because of the great volume of unpaid bills, the compulsory shrinking share of the MoU, the secession of ADMIE, and the need to refinance its previous loans. The refinancing of older loans for this year and 2017 is estimated at about 1.5 billion Euros. However PPC top executives, both in private meetings and in their public statements, indicate that the company “holds up” and that they are considered various scenarios of refinancing the old


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DESFA also in the final straight Optimism is in the air regarding the sale of DESFA, the Hellenic Gas Transmission System Operator, since several of the main obstacles have been overcome, but this does not mean that all unresolved issues have also been resolved. Sources state that the Azerbaijani Socar and Italian Snam, ie the two companies that will obtain 66% of DESFA, have raised the issue of ensuring a high dividend yield, however, they estimate that the negotiations will end soon. In midOctober, however, the chairman of the Hellenic Republic Asset Development Fund (HRADF) Mr. Stergios Pitsiorlas said that “there are still issues to be settled”. The next steps of the DESFA case include a visit to Athens by senior officials of the two companies, which are in constant communication with each other for forming the share purchase agreement, as the Italian Snam will acquire a significant share of the Azeris’ share, possibly even more than 30%. According to press reports in Azerbaijan, the final participation of Socar in DESFA may fall below 36%. The fact that the tipping point to accelerate the privatization of DESFA were the contacts which were carried out in early October bythe economic adviser to the Prime Minister Mr. Dimitris Liakos with senior executives of Snam and Socar is of particular interest. After the intervention of the Greek Prime Minister Mr. Alexis Tsipras, following his meeting in late September with the president of Socar Rovnagk Abdullayev, the impasse that had been created due to the

Skourletis regulation on tariffs was overcome. More specifically, the network usage fees are to be increased by 36%, against an increase of 23% based on the Skourletis amendment. The final price of natural gas for industrial use is expected based on the new rates to rise by 2.5% to 4%, depending on each consumer industry profile. Regarding pending issues, according to Azerbaijani media reports, the dividend that each of the three partners of the new shareholder structure DESFA shall receive from the profits is still on the discussion table. Socar and Snam have requested to ensure high dividends through an agreement to bypass the corporate rules of DESFA, which allows for zero dividend. We bring to mind the fact that the reduction of Socar’s share in DESFA, initially from 66% to 49%, was the condition set by the European Competition Commission to give the “green light” for the sale. The Azerbaijani company sought a third party investor and selected the Italian Snam, which is also a Socar partner in the Transadriatic Pipeline (TAP). The initial discussions related to the sale to Snam of a percentage of 17% in recent months, however it became known that the Italians are interested in a largest share, such as 30%, perhaps even more. Snam, the administrator of the Italian gas network, will also have the management of the new DESFA, while the acquisition price for the 66% of its shares amounts to 400 million Euros.


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PPC expects a “good” price for the 24% of ADMIE as it faces a very difficult economic situation because of the great volume of unpaid bills, the compulsory shrinking share of the MoU, the secession of ADMIE, and the need to refinance its previous loans

debt. As it appears, the PPC anticipates to repay part of the State’s debts for power consumption that are estimated at approximately 200 million Euros, while it is claiming earlier State debts for utilities (SGI) of the 2012-2015 period that have not been paid.

of the share capital of ADMIE, and is expected to be introduced in the Athens Stock Exchange. PPC will initially be the shareholder in the holding company, and then the shares will be distributed to the PPC shareholders, ie 51% to the State and 49% to private shareholders.

The next steps

The PPC announcement

But what will happen from now on with ADMIE? By early November at the latest, the proclamation of the preferred investor is expected after verification of bids and evidence already in progress by part of the PPC, as already stated above. Immediately after that, the negotiations for the sale agreement and shareholders agreement (SPA and SHA, respectively) will commence, and the necessary approvals from the competent bodies (Court of Auditors, the Competition Commission, European Commission) will follow. The completion of the sale is expected to take place early in 2017 with the installation of a new investor in the company. At the same time, of course, the procedures for the holding company are in progress, which controls 51%

“The Public Power Corporation SA announces that the selection of the strategic investor for the 24% of ADMIE is proceeding normally with the examination of the documents and data of the two candidates that have submitted the bid, the Chinese State Grid and Italian Terna together with the investment fund F2i, by the PPC committee and the Company’s advisors”, stated verbatim the PPC announcement, thus meaning the countdown to complete the muchneeded privatization of ADMIE.


Privatizations in Bulgaria Ilin Stanev*

06 16

UTILITY SECTOR IN BULGARIA – NOT FOR PRIVATIZATION The utility sector in Bulgaria is largely privatized, while the telecommunication services are entirely in private hands for over ten years now. The few exceptions are the water and sewage companies, the large electricity producers, the gas trader Bulgargaz and the gas and the electricity transmission system operators.

Even though state monopoly has ceased long ago, its footprint is still large. For example the few state-owned energy companies, generate half of the revenues among the 30 biggest companies in the energy sector, the Capital annual ranking K-100 shows. The key companies in the energy sector are still state owned and have crucial influence on the market. For example at the end of 2015, following the unfriendly split between the shareholders of Overgas – the Russian Gazprom and the Bulgarian Overgas Holding, the biggest gas distributor was left without a gas supplier. As a consequence it was left at the mercy of Bulgargaz, which is still the only gas supplier in Bulgaria. For a few days there were some doubts that Overgas’ client might be left in the cold. There are many ideas promoting privatization in the sector, but there are probably farfetched, given the broad public disapproval of further liberalization in the utility sector. Such an attitude gives confidence to some left wing politicians who regularly talk about renationalization of the energy distribution companies.

What is left in the State hands?

The process of privatization and liberalization of the Bulgarian energy market kicked off in the last decade of the previous century. At the beginning, mostly maintenance and supply companies were put up for sale, while the big privatization was postponed. It was thought that the entire process needed to be tackled with care. In reality, the lack of capital among the prospective Bulgarian buyers was a much more plausible explanation. As a result, the state decided to withdraw from the sector around 2004-2005, prompted by the international creditors. In period of only a couple of years many small electricity producers and central heating companies were sold. The most appetizing bite however were the electricity distribution companies which went to the Czech CEZ, the German E.oN (later it sold its Bulgarian subsidiary to another Czech company - Energo-pro), the Austrian EVN, while a single Bulgarian investor was able to get only one negligibly small electricity distributor. What was left in state hands were the biggest electricity producers – NPP Kozlodui, TPP Marica Iztok 2,


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the Sofia central heating company (which frequently changes its ownership between the state and the Sofia municipality), the two former monopolies – the National Electricity Company (NEK), Bulgargaz and the transmission system operators ESO and Bulgartransgaz. All the sate assets are under the umbrella of the Bulgarian Energy Holding (BEH) and had combined revenue in 2015 of more than 4 bln Euros. The privatization of the water utilities was stalled long ago. Only the Sofia (Bulgaria’s capital) water and sewage system is managed under concession by the privately owned Sofiyska Voda (although the municipality has a minority share). The deal was signed in 2000 and it was considered as an example to be followed, but no other water utility in Bulgaria has either been privatized or offered for concession.

Drivers of privatization

The state owned utility companies have always been regarded as cash cows for the government and a good place to appoint some friends. Those useful

functions make them a very difficult privatization target. At the same time, their ineffective management triggers frequent calls for privatization. Their huge assets and probable high sale prices helps as well – in a time of crisis they are every government’s solution for fiscal troubles. In the last couple of years the privatization was discussed several times. Most recently the government considered selling a minority stake in BEH, most probably on the Bulgarian stock exchange. The dire state of some of the companies like NEK would have made the price too low which made the entire idea sink very quickly. The privatization of the companies in BEH is much more reasonable which are in good financial position and have guaranteed cash flows like Bulgartransgaz and ESO. As transmission operators they have secured revenue and would attract interest among strategic and financial investors. This approach however is not in favor with the government in Bulgaria which depends on the two TSOs to

financially support the other energy companies in BEH. One of the drivers for privatization is the European Commission which in the beginning of 2016 suggested that Bulgartransgaz found new investors. The intervention of the Commission was caused by the behavior of the transmission company which prevented competition on the gas market. Now it seems that Bulgartransgaz found some market Zeist, opening its grid for more companies to compete and the pressure to privatize was alleviated. For example the company suggested creating a joint venture with outside investors for the creation of a gas hub in Bulgaria. However the EC investigation is has not been concluded yet.

The counter privatization push

The private utility companies are frequently accused of increasing consumer prices, something which became a sticky stereotype. In early 2013, the mass protests that erupted in Bulgaria and which eventually caused the resignation of the government in February, were stirred by the increased


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The state might decide to sell part of its shares in the energy companies when they improve their financial results Top 20 in the energy sector

energy bills. They were the result of an increase of electricity prices, something the utilities had nothing to do with, but being the ones the consumers see at the end, they received the entire discontent. Something similar is going on with Sofiyska voda. Every time the company proposes to raise the price of water in order to invest more money in its derelict infrastructure, there is a public outcry and the Sofia municipal council and the state regulator vote against the increase. Most people think that the price freeze

restricts Veolia, which owns 77.1% of the company (the rest are owned by Sofia municipality) to make greater profit. In reality, the French company has guaranteed its return to the investment, while the low prices have negative effect only on the aging water pipes. As a result of the public unwillingness to let in new private investors, the Byzantine ownership structure of the water companies (some of them are owned by several municipalities with different interests and plans), the lack of consolidation (there are 56 companies in the sector) and the low prices of their regulated services, the water and sewage utilities are not very attractive for privatization. The only ones interested in a hypothetical privatization process are some Bulgarian companies that could guarantee their profit with good political connections. The verdict is that the status quo in the utility sector will remain. But this means no change at all. Some privately and some state owned utilities are ready to experiment with external management of their activities (notably in the water sector). The state might decide to sell part of its shares in the energy companies when they improve their financial results. But more importantly, the utility market is opening up for new players – energy traders, efficiency managers and advisory companies.

*Ilin Stanev is editor in Capital Weekly, Bulgaria


Privatizations in Serbia Stevan Veljovic

07

RESTRUCTURING AND SERIOUS REFORMS FOR SERBIA’S EPS The Serbian government has so far denied any speculation about the possible privatization of EPS, Serbia’s power utility. However, with ongoing activities on the company’s restructuring, the possibility of introducing a minority partner cannot be excluded.

Apart from the temporary speculations regarding a possible privatization, so far there was no clear decision about selling EPS, Serbia’s largest utility company. Both the government and the company’s management are now focused on the reorganization and financial consolidation of the company, as declared in the August expose of Serbia’s Prime Minister Aleksandar Vucic. Given the size of the company and the lack of reforms in previous years, it is easy to tell why reforming EPS is a top priority. According to the analysis of the Fiscal Council, an independent body, EPS’s liabilities rose from 577 million in 2008 to 1.15 billion Euros in 2015. Only in 2015, the level of the company’s debt rose by 250 million Euros, including both short-term and long-term loans. Even though most loans were earmarked for investments, the size of the debt requires the government to monitor the company more closely, in order to avoid an overflow of its liabilities into the state budget and public debt.

Serbia’s public debt amounted to 24.2 billion Euros at the end of August, or 72.1 per cent of the GDP. The Council warned that every year EPS allocates more money for liquidation than for investments. This can explain why the effects of investments, in terms of improving efficiency, are missing. “Even if some form of external intervention in order to improve EPS’s operations - such as minority privatization, the introduction of professional management etc. is being considered - this must not delay the solving of crucial problems within the company. Serbia’s public finances do not have the capacity to bear the burden of EPS’s malfunctioning, or to take on their huge liabilities”, the Council warned in its June analysis on fiscal consolidation and reforms from 2016 to 2020.

Reducing surplus labor a priority The list of EPS’s key problems is known for years: it included high expenses for employees, low percentage of debt collection, low price of electricity, high losses from the network, inadequate investment and steady growth of

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Slobodan Ruzic

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indebtedness. These problems have also attracted the attention of Serbia’s international partners, IMF and the World Bank, who are both involved in the reorganization process. Serbia is now in the second year of a three-year precautionary Stand-By Arrangement, worth 1.2 billion Euros, which the IMF approved in February 2015. Sebastian Sosa, the IMF representative in Belgrade, said recently that EPS had made some progress by adopting the optimization and financial consolidation plans, but stressed the need to accelerate the restructuring of state companies that pose a fiscal risk.

optimization plan with at least 1.000 net staff position reduction in 2016.

Given the size of the company and the lack of reforms in previous years, it is easy to tell why reforming EPS is a top priority

to prepare EPS for potential investors. “These steps are extorted, mostly formal and used to show international institutions that constantly put us under pressure that we are working on something”, he said.

Increasing efficiency only through privatization In the same document, the IMF envisages a change in the legal status of EPS to a joint stock company by July 1st 2017, “with an aim of attracting minority private investment participation that could further enhance the corporate governance and viability of the company and ensure its professional management.”

The 3.8 per cent increase in the price of electricity in October, the second rise since August 2015 (when the price rose 4.5 per cent), is approved in order to reduce financial gaps and narrow the disparity between domestic and regional markets. However, the price increase is only a part of the problem solving. Having in mind that the company now employs approximately 35,000 workers, with high-labor costs, the issue of surplus labor remains one of its priorities.

This measure, according to the IMF report on the review, was important to minimize fiscal risks and ensure the financial sustainability of the EPS. However, this number is only a part of the estimated labor surplus in EPS, which is at least several times higher.

The intention to introduce minority partner in EPS is not a new one. Prime Minister Vucic, in his expose in April 2014, declared the intention of his (previous) cabinet to have a minority partner for EPS by the end of 2015, but nothing happened in that regard.

The financial restructuring plan, which was adopted in June 2015, also includes enhanced bill collection rates, reducing technical losses and staff cuts.

As a prior action to adopting the fourth and fifth review of the arrangement in September 2016, the EPS’s supervisory board has adopted, in consultation with the World Bank, a credible 2016-19

Slobodan Ruzic, energy expert and general manager of the Energy Saving Group, a consultancy, said that the aforementioned measures will not make EPS sustainable, nor are they intended

In most other cases, the government had consistently denied the intention to sell EPS. The minister of mining and energy, Aleksandar Antic, in a recent statement denied the speculations about ongoing preparations to privatize EPS. He said that within the restructuring process the consultants will identify the company’s assets and estimate the company’s value. “We are creating conditions


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to transform EPS into a joint stock company“, Antic noted. The alleged intention to improve corporate governance and ensure professional management by introducing a minority partner, rises another question; Could the same goal be achieved over the years without minority partners? Or, if this is the only way to do it, why wasn’t this step made earlier? Slobodan Ruzic said that theoritically it would be possible to improve EPS’s efficiency without any privatization,

EPS financial liabilities 2008-2015 (in million Euros) 2008 577 2009 566 2010 626 2011 604 2012 802 2013 796 2014 880 2015 1,149

provided that the state, as the owner, would have an interest for that and provided the company is run by a professional and responsible management. “There are such examples in countries like France, but in Serbia it is obviously possible only in theory“, Ruzic explained. He said that over the past 15 years, the changes in EPS didn’t bring improvements, but on the contrary – each regime brought its own personnel, and the level of professionalism in the managing structure was even lower that in communism. “Unfortunately, under the present circumstances, there would be no significant increase in efficiency and the level of professionalism in management without privatization”. He believes that there isn’t a genuine willingness in Serbia neither to increase the company’s efficiency and ensure its sustainability nor to privatize the company. “I am afraid that this will happen only as a measure of last resort, which means it would have been done under very unfavorable conditions”, he explained.

Given that EPS is one of the most important systems in the country, Ruzic believes that from the perspective of energy safety and price stability, it would be best if the company is not privatized at all. The alternative scenario to the one he described earlier would be to eliminate the political influence from the company, to increase professional standards in its management, to increase the efficiency by preventing rigging tenders etc. Also, it would require explaining to the public that the increase in the price of electricity is needed if the company is to invest in new power plants and networks. “The private capital can be introduced through investments in new power plants using coal and renewable energy, with the support of both the Government and EPS”, he added. “Such a scenario would be ideal. But is it realistic to expect it to occur in Serbia? Unfourtunately, no, and it won’t be for a long time“, Ruzic concluded.


Privatizations in Serbia Vladimir Spasic

08 22

EPS PRIVATIZATION: A POLITICAL DECISION In the past ten years there were many rumors that EPS was going to be privatized. German and Russian companies were among the most often mentioned buyers. But nothing ever happened. Having in mind that EPS is the most valuable Serbian company, the privatization will first be a political and later on a business decision.

The latest rumor regarding its privatization was heard in July when daily newspapers reported the privatization law would be amended by the end of the year to clear the way for privatizations of strategic enterprises, including the EPS as a priority target. However, the Minister of Economy Zeljko Sertic stated there would be no amendments to the law that would allow for any sale of strategic resources. A few weeks after that rumor, EPS officially hired Energoprojekt Entel and the Institute of Economics to assess the value of the Company. This was seen as a preparation for sale. But again the Minister of Mining and energy Aleksandar Antic said that an appraisal of the property is aimed at strengthening Serbia’s most significant public enterprise. “EPS is in a stage of restructuring, we have completed the corporatization stage and we are implementing a Financial Consolidation plan. As part of those measures, we have plans to transform EPS into a joint stock company in 2017. That is why EPS’s property is being defined right now, after which

the company value must be appraised. Media speculations that this is being done for the purpose of privatization are far from the truth”, Antic said.

Reorganization

In 2015, a Reorganisation Plan was launched and the Company’s Statute was amended on 25 May 2015 to comply with a status change that took place on July 1st 2015. The Public Enterprise “Elektroprivreda Srbije”, together with its subsidiaries represent the EPS Group. Within the EPS Group, comprising of PE EPS, the Parent Company, and its subsidiaries, by July 1st 2015, a total of 15 companies operated. After the status change on July 1st 2015, the subsidiaries engaged in the production of electricity and the production of coal merged to the Parent Company. Furthermore, after the merger four companies engaged in the distribution of electricity and management of the distribution systems merged into “EPS Distribution”. Three additional companies operated within the EPS Group: the Distribution System Operator “EPS Distribution”, “EPS Supply”, and “EPS Trading”. “EPS


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EPS technical characteristics GENERATION CAPACITIES 7,304 MW ELECTRICITY GENERATION 35,661 GWh COAL PRODUCTION 37,029,091t SALE (In EPS Group) 33,729 GWh SALE (Out of EPS Group) 2,957 GWh TOTAL SALE 36,686 GWh PURCHASE (Out of EPS Group) 1,042 GWh NUMBER OF CUSTOMERS Total 3,422,387 Guaranteed supply 3,410,368 Last resort supply 719 Commercial supply 11,300 AVERAGE CONSUMPTION (per month) 365 kWh

Trading” headquartered in Ljubljana, in the Republic of Slovenia, registered on July 1st 2014, is engaged in electricity trade in the European Union. On April 3rd 2015 this subsidiary started with electricity trade without intermediaries on the HUPX – Hungarian Power Exchange. The reorganization was followed by a financial consolidation plan that was carried out in cooperation between

World Bank experts and the Serbian Government. There is very little information about this plan because it is secret to the public. On one occasion the Minister of Mining and Energy Aleksandar Antic said that this is primarily a plan of financial consolidation and contains elements to reduce technical losses, increase the collection of sold electricity and achieve efficient functioning of the internal organization. “Its aim is

New power plant after 25 years EPS is in the last preparations stages for building a new power plant after more than 25 years. The Chinese Exim Bank gave the company a long term loan of 608.26 million dollars for the implementation of Phase II of Package Project Kostolac B, that shall finance works for the construction of new Unit B3 in Thermal Power Plant Kostolac B with a capacity of 350 megawatts and the extension of the capacities of Open cast mine Drmno from nine million to 12 million tons of coal annually. The repayment deadline is 20 years,

with a grace period of seven years and contracted annual interest rate of 2.5 percent. The Chinese loan shall cover financing of 85 percent of the value of the project which is estimated at 715.6 million dollars. The new Unit should be connected to the power network as of 2020. All energy standards of the European Union and Serbia, especially in the field of environmental protection will be met. The construction will be managed by CMEC (China Machinery Engineering Corporation).


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EPS daughter companies 1. “Energija Novi Sad”, a.d. Novi Sad, established together with the City of Novi Sad - a 50% stake in the company’s share capital. The Company was established for the modernization of the Combined Heat and Power plant “Novi Sad”. 2. “Ibarske hidorelektrane” d.o.o. Kraljevo, was established together with SECI ENERGIA S.p.A., Italy, Bologna. The Company began operations on 3 December 2010, in order to establish ten cascade type hydro power plants with a total capacity of 103 MW, as a facility for the production and sale of electricity from renewable sources. 3. “Moravske hidroelektrane” d.o.o., Beograd established together with RWE Innogy, Germany (RWE AG), - a 49 % share in the capital amounting to EUR 1,960,000. “Moravske hidroelektrane” was registered with competent authorities on 23 August 2011. The Company was established with a view to building hydropower plants on the river Morava, comprising no less than five hydropower plants with a total capacity of 150 MW.

also to consider the optimal number of employees in different organizational structures, as well as the assessment of the economic feasibility of all thermal power capacities of EPS”, Antic said.

Workers

As of 31 December 2015, the Group had 31,784 employees (31 December 2014, – 32.120 employees). It is estimated that EPS has a surplus of 5 to 10 thousand employees. A few months ago, the World Bank made a suggestion for early retirement and voluntary departure of employees which was accepted by the IMF and the Serbian Government. The Program was designed for the employees who have 40 years of service and less than 65 years of age which means they have two to three years to full retirement. The employees that decide to apply for this program get a severance payment from 5,000 up to 20,000 Euros. So far about 1,860 workers applied. EPS is expecting to save up to 100 million Euros until 2020. The Minister of Energy and Mining Aleksandar Antic said that declaring further redundancies in EPS will not be made until the systematization is completed and that is expected in March 2017. The systematization will indicate which employees are no longer necessary.

Privatization - yes or no

Professor of economics Milojko said to EnergyWorld magazine that to his knowledge the Serbian Government doesn’t have plans for a majority privatization of EPS. He recalls that in previous years, the Government representatives said that the State could offer a minority stake to international financial organizations, but this is not heard lately. “I believe that international financial organizations such as EBRD for example, could agree to become minority owners of EPS, provided that they get control of company and are also obliged by the Government that there will be majority privatization in foreseeable future”, Arsic said. The Professor considers a majority privatization of EPS in the next ten years as not such a good solution, because the Company will be the largest producer of electricity in Serbia for the decades to came and the State doesn’t dispose institutions strong enough for the effective control over private monopolies. However, a minority privatization of EPS combined with its departization and the introduction of professional management could be implemented in a relatively short period of time.


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“A minority privatization combined with EPS shares placement through the stock exchange would be a good decision as it could attract financial resources from citizens and investors to build new capacities and solve environmental issues. However, a minority privatization wouldn’t be able to cut off political party impacts on EPS and could not cope with unions. In addition to the minority privatization of EPS, it is important for the development of Serbian energy industry to liberalize the production of electricity with the inclusion of large private producers”, Arsic said. What he considers the largest problem for EPS, is the use of the company

for social functions, but also for the financing of eligible private companies. The consequences of social functions transfer to the EPS are low energy prices, toleration of non-payment of consumed electricity, the high losses in energy transmission, employment of a large number of unnecessary workers, high salaries for some segments of employees... Moreover, this company has been used to finance the ruling parties through privileged private companies. “These systematic irrationalities in the business have created fertile ground for various forms of corruption and fraud. The monopoly position of the

Companies in Kosovo and Metohija PE EPS is the founder of three public companies situated in Kosovo and Metohija: the Public Enterprise for the production of thermoelectric energy Thermal Power Plants “Kosovo”, the Public Enterprise for the production, processing and transportation of coal, PK “Kosovo” and the Public Enterprise for Electricity distribution Elektrokosmet. However since NATO aggression 1999 EPS does not operate its coal mines and thermal power plants in this province.

company is abused by the unions, which have often prevented or watered down the restructuring process. This situation led to EPS’s inability to invest in the maintenance of the existing and construction of new capacities from its own resources”, Arsic added. Although EPS has not built a single significant energy capacity for decades, the company is already in debt, because it is receiving loans to finance its current expenses. The great problem of EPS, but also of the state of Serbia, is neglected investments to reduce environmental pollution by thermal power plants, and at this moment these purposes require an investment of several hundred million Euros. “Therefore, the state of Serbia must achieve such an agreement with the EU that will not jeopardize the continued operation of its thermal power plants in the coming decades and simultaneously to commit itself to reducing pollution by introducing new technologies”, Arsic said.


Electricity Yiannis Pispirigos

09 26

GREEK PPC AGREES NEW TARIFFS WITH ALUMINIUM Greece’s main power utility PPC secured shareholder approval of tariffs the company will charge its biggest client Aluminium of Greece, concluding two years of negotiations between the two companies over power supply prices.

PPC, which is 51 percent owned by the state, and aluminium producer Aluminium, owned by the Mytilineos energy group, have been embroiled in a decade-long standoff over charges. An arbitration court settled the issue for the 2010-2013 period and the two sides have been in talks since 2014 to bridge their differences by themselves. Agreeing new cost-based electricity tariffs that PPC charges to the country’s biggest industries is part of a set of reforms Greece has to conclude to secure fresh loans later.

Mytilineos: A final close to the conflict In a statement, Mytilineos group said the negotiations took place in a constructive and positive climate, driven by the need “to consider the financial interests of the two companies, the amicable settlement of problems in the energy market and, of course, the competitiveness of the Greek Industry”. A solution on pricing between the PPC and the country’s biggest electricity consumer has been a constant requirement of

Greece’s international lenders. According to the company’s statement, “it should be stressed that the negotiations took place in a constructive and positive climate, driven by the need to consider the financial interests of the two companies, the amicable settlement of problems in the energy market and, of course, the competitiveness of the Greek Industry. Mytilineos group welcomes this agreement, which acknowledges the specific consumption profile of Aluminium of Greece and, at the same time, enhances the PPC’s liquidity at a challenging juncture. The group’s standing position is that the PPC should be supported, as without the PPC there can be no electricity market and no high voltage-consuming industry. This position, made repeatedly by the Mytilineos group Chairman in the framework of the group’s general meetings and other public statements, is confirmed by the part of the agreement which foresees the immediate payment by the Group to the PPC, without


27

interest, of an advance of €100 million. The agreement also foresees that at the beginning of each contractual year, Aluminium of Greece will pay to the PPC, again without interest, an advance equal to 30% of the annual value of electricity. The final commercial clause was also agreed in favour of the PPC: in the event of an increase in Aluminium prices on the London Metal Exchange (LME), the PPC will receive a bonus on the MWh price; yet in case of a price decline PPC will incur no penalty. This mutually beneficial and rigorously structured agreement marks the beginning of a new era in the relations of the PPC – the country’s largest industry – with its largest customer. There can be no doubt that the country’s economic recovery and its new economic model presuppose the existence of a globally competitive industry and a strong and financially and operationally healthy PPC”.

A win-win agreement

Energy analysts told “EnergyWorld” that this “balanced” agreement offers

mutual economic benefits for the two companies. It enhances the PPC’s liquidity at a challenging juncture and, at the same time, acknowledges the specific consumption profile of Aluminium of Greece, as the biggest high voltage industry. In August, the total outstanding debts toward PPC exceeded €3 billion and represented over 50% of its annual turnover. Particularly, the deal foresees the immediate payment by Mytilineos group to the PPC, without interest, of an advance of €100 million. In addition, at the beginning of each contractual year the company will pay to the PPC an advance equal to 30% of the annual value of electricity. “The final commercial clause was also agreed in favour of the PPC: in the event of an increase in Aluminium prices on the London Metal Exchange (LME), the PPC will receive a bonus on the MWh price; yet in case of a price decline PPC will incur no penalty”, Aluminium Greece noted.

A new era

Industry sources state that the PPC’s “strategic” decision to make a competitive offer on pricing indicated the government’s intention to back domestic industry. “With such deals the Greek industry will manage to enhance its export-driven profile and return the value back to the Greek economy”. The same sources explained that this move was a positive sign for the Greek economy in general, as international creditors see the business environment in the debt-ridden country changing.


Electricity Emilia Damian

10 28

TRAPS IN CHANGING AN ENERGY SUPPLIER The energy consumers can change their supplier, but must be aware of the traps! Some suppliers don’t reveal all the costs included.


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Energy consumers must be well informed about the risks involved in the change of their energy supplier before making this step, as in all companies there might be traps. “We have to be very careful when changing our supplier, because it is a free market. Before you decide to change your energy supplier, you must be very well informed. There can be traps in the suppliers’ offers. It is proof of seriousness and maturity if you decide to make this step”, said Corneliu Bodea, Vice-president of Adrem Invest, a service company which acts on the Romanian energy market. He also said that the state should provide consumers all possible ways so they can be informed about their duties and rights. “I think the first duty is for the consumers, not the state, to be informed. The state makes available to you any means of information, however the duty to inform is yours”, said the company official.

Greater problems

According to him, there are currently other more important issues to solve on the regulated segment of electricity, which are the inclusion of the costs in the bills with the implementation of smart meters. “The problem Romania faces today on the domestic consumer market is not changing the supplier. We have more serious problems that we must resolve. We have major projects such as “smart metering” (implementing

smart meters – editor’s note), targeting 9 million consumers. If we implement this project to 5 million consumers at a price of 100 Euros per consumer, the cost amounts to over 500 million. The money will be supported in charge of energy, so we have problems more important than changing our suppliers. Sure, in Romania, if the market is liberated, there will be hundreds of offers. But we must be responsible while making the decision and not complain later”, said Bodea.

We have to be very carefully when changing the supplier, because it is a free market. Before you decide to change the supplier, you must be very well informed – Corneliu Bodea, Vice-president of Adrem Invest Pay attention!

The same message towards the energy consumers also comes from the Energy Regulatory Authority (ANRE). Niculae

Havrilet, ANRE president, said that users should be aware of all suppliers that promise very low prices as they may have hidden clauses and even illegal ones. He pointed out that although some deals appear attractive at first glance, it is better to make sure that they have favorable terms throughout the duration of the contract and comply with the relevant legal provisions. It’s about possible offers that do not contain information about the value of the green certificates and cogeneration contribution. The promise that you will not have to pay such taxes, coming from any supplier, should not be taken into consideration, for they don’t comply with the legislation. The supplier cannot relieve the final consumers from paying these fees, because these are obligations established by law, argued the ANRE head. Havrilet advised the consumers, if they choose to enter into a contract with a new supplier, to be careful regarding the price, the duration of the contract, the terms and conditions of payment, guaranteeing contractual clauses on the rights and obligations, including the terms of penalty. Other clauses requiring attention are the conditions under which the parties may renegotiate the terms of the contract, the conditions for terminating the contract and terms which may take effect after its termination.


Geopolitics of energy Yiannis Pispirigos

11 30

THE COOPERATION OF DEPA - SONATRACH BROADENS The further development of the existing LNG supply contract between the Greek DEPA and the Algerian Sonatrach, as well as the broadening of the existing cooperation between them were the subject of DEPA’s CEO, Mr. Theodore Kitsakos contacts’, at an international energy forum.


Mr. Theodore Kitsakos

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On September 26th, 2016, DEPA’s CEO Mr. Theodore Kitsakos went to Algiers to meet with representatives of Sonatrach and participate at the 15th

International Energy Forum, held from September 26 to 28, 2016, on “Global energy Transition: an enhanced role for energy dialogue”.

Regarding the ten year development program 2016-2025 by Energy Association of Natural Gas (ESFA) Meanwhile, DEPA submitted the company’s positions in the framework of the public consultation of the Ten Year Development Program of Greek National Natural Gas System (ESFA) from 2016 to 2025, which among others includes interventions for the development of terminal at Revithoussa, and the development of energy projects that will enable physical reverse flow from Greece to Turkey in the compression station in Kipoi, at Evros. In more details, regarding the tanker transfer station at Revythoussa given the international interest from Greece and abroad for receiving gas from the point in question, DEPA suggests the creation of two liquefied gas provision locations (LNG). Under the suggested 2016-2025 ESFA, the creation of a terminal tanker LNG refueling station at the Revithoussa facilities is suggested for the transportation and gasification at consumer facilities throughout Greece, mainly at the west of the country where there is no possibility of using natural gas, since the National Natural Gas Transmission System has been developed mainly

in the eastern part of the country. Regarding the second upgrade of the terminal at Revythoussa, DEPA points out that the project works should include the necessary infrastructure for the transshipment of small and medium-sized ships (1.000 – 10.000 cubic meters of LNG) in order to enhance the development of the distribution of natural gas in remote areas, and the development of its use as fuel (propulsion) in ships. Combined with the truck loading, it is anticipated to enable the best possible commercialization of Revythoussa, while it is stressed that this project should be considered separately from the question of increasing the terminal’s storage capacity. As for the compressor station at Kipoi, it is noted that it is necessary to include projects that will enable the physical reverse flow from Greece to Turkey, which will boost cross-border trade with the largest neighboring market for the benefit of the Hellenic Gas Transmission System Operator – DESFA.

High level meetings

Mr. Kitsakos met with the Chairman and CEO of Sonatrach Mr. Amine Mazouzi, the managing director of the electricity company of Algeria Sonelgaz Mr. Mustapha Guitouni and other senior officials of Sonatrach, to discuss issues related to the further development the existing contract for the supply of liquefied natural gas between DEPA and Sonatrach and the broadening of their cooperation in other fields of mutual business interest. At the same time Mr. Kitsakos attended the 15th International Energy Forum, which was attended by the Prime Minister of Algeria, the energy ministers of Algeria, Russia, Iran and Saudi Arabia, CEOs from several international oil and natural gas companies and senior officials from international organizations such as the International Energy Association (IEA), international Gas Union (IGU) and the International Energy Forum (IEF).

Oil was also put on the discussion table The forum topics related to oil and natural gas purchases, renewable energy sources as well as energy security. On the sidelines of the Forum, the largest oil producers in the world met at an informal meeting of OPEC on oil production and the course of international prices.


Oil & gas Emilia Damian

12 32

ROMANIA AND BULGARIA GAS CONNECTED The Romanian and the Bulgarian gas systems were connected for the first time on September 25th.

The main pipeline to connect Romania’s national natural gas transmission network with Bulgaria’s completed the pipeline’s passage through the bed of the Danube River, essentially meaning that the two systems got interconnected for the first time on September 25th.

once again underscores the attention attached by Romania’s Government to the Giurgiu-Ruse interconnector, given the strategic importance of this investment in ensuring energy security and safe provision of natural gas to the two countries”, the ministry says.

In a press statement, the Romanian Economy Ministry says Romania’s Minister of Economy, Trade and Relations with the Business Environment, Costin Borc, which is also deputy primeminister, toured the site of the GiurgiuRuse natural gas interconnector where he met with officials of the companies involved in the project - Transgaz, Inspet and Habau.

Gas to run both ways

“At the Comasca Danube underpass, Borc watched the main conduct being laid for the under-Danube passage. The underpass works were completed on Sunday, September 25th, 2016, which in fact means the transmission systems of Bulgaria and Romania are interconnected”, the statement says. “The Romanian deputy prime minister’s visit to the Comasca- Romania site

Borc’s visit continued at the Giurgiu natural gas metering station, which will allow two-way circulation of the natural gas, and which has been set for a maximum flow of 1.5 billion cubic meters a year both ways. From the metering station, the natural gas is transmitted via DN 500 mm pipelines, 5.1-km long, to the valve group at Comasca. The actual length of the underpass is 2.1 km, from the valve group at Comasca to the similar group at Marten, Bulgaria. “This is the largest such project in Romania and Europe so far, a groundbreaking one at that”, the ministry says. The Romania-Bulgaria interconnector


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has received European funds worth 213 million Euros, 10 million for the works on the Romanian bank of Danube and 13 million Euros for the part in Bulgaria, with December 31st, 2016 set as the deadline for its completion. In the first year after the commissioning of the interconnector, Transgaz will provide a flow of 0.5 billion cubic meters, 29-bar pressure at the border.

Romania-Greece agreement

At the end of September, Transgaz has signed a memorandum of understanding with the Greek company DESFA, the operator of the Natural Gas System in Greece. DESFA also operates the Natural Gas National Transport System and the LNG terminal on the Revithoussa island. The event was attended by Evangelos Tournakis, Economic Counsellor and Ioannis Markos, Economic and Commerce Councilor with the Embassy of Greece in Romania. Given DESFA’s interest in developing a collaboration with Transgaz, the signing of the memorandum of understanding between the two companies has as a purpose to develop a common approach of current and future projects on gas transportation as per the EU legislation, Transgaz said in a statement. Representatives of the two energy companies discussed the need to continue to develop and integrate the gas markets on the internal energy market of the EU, the diversification of gas supply

roads and the creation of access to new gas sources, thus improving the safety of natural gas supply at a regional and European level.

planning to contribute to the safety of the supply of natural gas in the Central and Eastern European region.

The two new companies are supporting solutions to grow cross-border cooperation, promote transparent and open access of market participants to the natural gas transport and are

The European Commission has analyzed the state aid given by the Romanian state to Transgaz for the Iasi-Ungheni gas pipe and observed that the legislation was respected, said Bogdan Chiritoiu, the president of Competition Council, at the beginning of October.

The European Commission has analyzed the state aid given by the Romanian state to Transgaz for the gas pipe Iasi-Ungheni and observed that the legislation was respected – Bogdan Chiritoiu, president of the Romanian Competition Council

Blue flag for Iasi-Ungheni

According to Chiritoiu, since the legislation was modified regarding the state aid on July 1st 2014, the European Commission has focused its activity on the important cases and on the evaluation of the facilities after being given by the member states to verify the way in which they respect the regulations from the field. Before July 2014, the European forum was analyzing the aid measures before being put into practice. The state aid scheme is available until December 31st 2020 and has a budget of EUR 925 million. In 2015 Transgaz, received a state aid of RON 81 million (EUR 19 million) to make the Iasi-Ungheni gas pipe, financed through the Trans-Border RomaniaMoldova Cooperation Program.


Oil & gas Solon Kassinis*

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CYPRUS: REGIONAL SYNERGIES WITH GREECE-EAST MED Since May 2004 Cyprus has been a full Member State of the European Union and as of 2008 it became a Member of the Eurozone. This is a guarantee of the ongoing political stability and improving economy ratings of the country. Additionally, Cyprus has a key geostrategic position as it is located at the crossroad of big energy routes, having an international impact and effectively connecting three large regions (Europe, Asia and Middle East / North Africa). Moreover, Cyprus is located within the East Med region, a region of high trading activity for fuels and other goods.

Although hydrocarbon exploration in Cyprus began in the 1940s, with some very early onshore and later offshore geological explorations, it was not until about 10 years ago that Cyprus set the framework and payed the road for the modern regime of hydrocarbon exploration, which is still in use today in the ongoing Oil & Gas activities within its Exclusive Economic Zone (EEZ). Oil & gas prospectivity in Cyprus looks very encouraging due to the promising regional geological background, the big hydrocarbon discoveries in the region and the various attractive major “plays” that have been identified. Also there are geological ‘links’ between ‘Zohr’ (offshore Egypt) and Block 11 (offshore Cyprus), leading to a prospective geological formation (yet to be drilled) in Block 11.

Oil & gas exploration activities

Cyprus’ offshore exploration frontier is summarized in the figure 1. A total of 13 blocks (in part of the EEZ) exist, out of which 4 have been licensed to large petroleum companies, 3 were made available through the 3rd Licensing Round

Offshore Cyprus and the rest remain as ‘open blocks’ (to be made available through future licensing rounds). There is also a discovery of natural gas known as ‘Aphrodite’, within Block 12. The latest licensing round was announced on 24 March 2016 for Blocks 6, 8 and 10, and the submission of applications expired on 22 July 2016. A total of 6 applications were received for the three available blocks, by 8 companies (see relevant Map 1). Exploration licenses on these blocks are expected to be awarded, and the relevant contracts signed, by early January 2017. TOTAL plans to drill its first exploration well in Block 11 in the beginning of 2017, while Eni plans to drill a new (third) exploration well in Block 9 by mid-2017. New licensees are expected to commence exploration drilling post 2018.

Cyprus’ domestic gas utilization prospects The development of the ‘Aphrodite’ gas field discovery entails a subsea


Figure 1

Map 1

Source: Ministry of Energy, Commerce, Industry and Tourism

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pipeline for gas supply to Cyprus’ domestic market, to meet current and future demand. Gas is readily in demand for power generation, while other opportunities in the domestic market exist, through the planned Methanol Production Plant. In the future, provided that larger or more quantities of gas are discovered, the domestic market demand may potentially expand to include petrochemicals industries, gas distribution for the commercial and residential sector, gas for transport vehicles etc.

or export. This arrangement is one of a series of steps towards supporting gas exports to Egypt, complementing any commercial discussions for the conclusion of the actual sales agreement(s) with buyers in Egypt.

Cyprus’ gas export options

‘Aphrodite’ was originally licensed 100% to Noble Energy, but following two farm-in procedures, Delek Exploration acquired 15%, Avner Oil Exploration acquired another 15% and lastly (November 2015), Shell/BG acquired 35% of the rights (Noble Energy remains with a stake of 35% and still acts as an operator). Shell brings substantial technical, financial and marketing capacity to the partnership, in parallel to being a large off-taker of LNG.

The development of the ‘Aphrodite’ gas field discovery entails gas supplies to Egypt (either for the domestic market there or for exports through existing Liquefaction Plants in Egypt) – shortterm strategy. In the case that larger or more quantities of gas are discovered in the near future, then other options may include gas transport via the proposed East-Med Gas Pipeline (for supply to Europe through TAP or IGI or IGB) and an LNG export facility (i.e. a liquefaction plant) in Cyprus – long-term strategy. The Government of Cyprus has recently signed a Cooperation Agreement with Egypt for gas exports from ‘Aphrodite’ to Egypt. This agreement concerns the transport of gas via a pipeline, from the ‘Aphrodite’ field in Cyprus’ Block 12 to a landing point in the exclusive economic zone of Egypt, or onshore Egypt, for either domestic consumption

‘Aphrodite’ discovery

‘Aphrodite’ is an offshore natural gas deposit that was discovered in December 2011 in Block 12 by Noble Energy. It is estimated to hold around 4Tcf (trillion cubic feet) of gross mean natural gas resources.

– Initially, the development of a subsea gathering system (around 5 subsea wells, subsea system and flowlines) – Production, extraction and processing of gas/condensates offshore (host facility will preferably be an FPSO) – Potential development synergies with Leviathan – Multiple natural gas demand outlets • Gas transport to Cyprus via subsea pipeline (to cover domestic demand) • Gas transport to Egypt via subsea pipeline (for Egyptian local demand, including LNG exports through existing facilities) The current timeline for the development of ‘Aphrodite’ is as follows: – Approval of FDP by the end of 2016 – Final Investment Decision (FID) by 2017-2018 – First gas in 2022

Following the preliminary Field Development Plan (FDP) that was submitted for the ‘Aphrodite’ gas field in Block 12, Noble Energy and its partners submitted a revised Development Plan in early May 2016, which is pending approval from the Ministry of Energy in Cyprus. The basic provisions set out in the above-mentioned FDP (potentially) include the following:

Cyprus energy prospects

Upcoming developments and activities for the next couple of years will determine the role of Cyprus in the Eastern Mediterranean region, as a significant gas export source. More exploration wells are expected in 2017 (by Total and Eni) and even more in 2018-2019 by the new licensees. When more discoveries are proven,


Map 2

Source: Noble Energy Inc.

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in addition to the planned production from ‘Aphrodite’, then Cyprus will only need the right infrastructure in order to become a gas exporter to Europe (by that time, it is expected that oil prices would have well recovered to allow for such investments). A strong partnership and rigid cooperation between the Eastern Mediterranean countries (especially Egypt, Greece and Israel), will prove as a key to accomplishing the above task.

East Med regional facts and figures The Map 2 shows the major gas discoveries to date in the Eastern Mediterranean region and the graphic on the right shows a projection on the demand for gas in this region. It is clear, based on the graphic, that demand far exceeds supply (since existing regional discoveries cannot meet current demand). Currently, there is a regional gas deficit of approximately 4 Bcf/d (billion cubic feet per day), projected to grow to 9 Bcf/d in 2025. Figure 1 summarizes the relatively recent discoveries in the Eastern Mediterranean region up to date and their corresponding status, while Map 3 gives an overview of the offshore blocks in Israel, including new blocks that were decided to be auctioned (24 in total). For Leviathan development, Noble Energy and its partners are considering, as a first stage, flowlines running from the subsea wellheads to a platform in shallow waters and then a pipeline

connecting the platform with Jordan to serve gas exports (recently, the signature of the relevant gas supply deal for a 15-year period, was announced). Another pipeline may connect with Israel to deliver gas, while for the second stage, Noble Energy and its partners are looking at the option of a pipeline to Egypt (for LNG exports through existing infrastructure) and also a tie-back to ‘Aphrodite’. The ‘Zohr’ discovery development is currently progressing fast and gas to market is expected within 2017 (gas will be processed on an offshore platform and will then be delivered onshore and distributed throughout Egypt through the domestic gas network).

Europe’s reliance on Eastern Mediterranean Rethinking Europe’s energy supply security and the diversification of energy sources and routes, considering oil and gas developments in the Eastern Mediterranean, and aiming at lifting the energy isolation, the European Commission drafted certain guidelines and a framework for the future EU energy strategy. Based on these targets, the European Commission prepares a list of PCIs (projects of common interest) by reviewing every 2 years the proposed energy infrastructure projects that meet a set of criteria fulfilling the above objectives. Energy reserves within the Eastern

Mediterranean region have their own underlining importance on Europe’s energy needs and can have a crucial role for strengthening EU`s energy security. Cyprus cooperates closely with Greece, Egypt and Israel for the development of a new natural gas corridor (known as the East Med Gas Pipeline) and a new electricity corridor (known as the EuroAsia Interconnector Cable). These, as well as all other PCIs for gas and electricity, are presented in the two maps below.

Focus on Greek oil & gas activities In 2012/2013 Greece proceeded with acquiring 12,430 of 2D seismic data in the offshore western and southern parts of the country. Later on, a Licensing Round for 20 offshore blocks and 3 onshore areas was announced. However, the financial problems and political instability that began around that time, did not allow for any progress to the Licensing Round for the offshore blocks. On the other hand, the applications received for the onshore blocks were assessed and three concession agreements were signed in 2014 (Katakolo / West Patraikos gulf / Ioannina).

Key oil and gas figures for Greece include the following (source: U.S. Energy Information Administration (EIA) International Energy Statistics): – Dry Natural Gas Production (total recorded in 2014): 0.2 Bcf – Proved gas reserves (estimated in Jan. 2014): 35 Bcf


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Figure 1

– Crude oil supply (recorded in 2014): 8,700 bbl/day – Proved oil reserves (estimated in Jan. 2015): 10 million bbl

Map 3

Any future plans for the oil and gas exploration in Greece are currently still difficult to predict. There are three steps towards regaining confidence and boosting oil and gas activities in Greece (something that will certainly assist the country in exiting from its financial recession and paying back its national debt). Greece, first of all, needs to resolve its financial issues (by means of a mechanism to settle its debt) in order to be able to attract

big companies and large investments. Secondly, Greece needs to declare its EEZ with Egypt and commence new seismic exploration activities, in order to collect a large amount of detailed data, which is necessary for the oil and gas companies to study and be able to draw conclusions on the oil and gas prospectivity offshore Greece. Finally, Greece needs to review its regime and framework for hydrocarbons’ exploration, in order to be able to manage the oil and gas activities better and then relaunch its Licensing Round with a view to concluding and awarding exploration licenses. The timing is important, while these steps may take considerable time to complete (2-3 years).

* Mr. Solon Kassinis is the founder and Managing Director of Kassinis International Consulting Ltd. He has been involved in the oil and gas sector and the energy sector in general for 36 years, where he served at various positions, in both private and governmental entities.


Renewable sources of energy Emilia Damian

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5.000 MW OF GREEN ENERGY IN ROMANIA The energy producers installed power from renewable sources accounted for 4.698 MW in Romania at the end of October.

Romania had almost 5.000 MW of green energy at the end of October. Thus, there were wind farms of 2.961 MW, photovoltaic panels with a total capacity of 1.317 MW, small hydro power plants (SHPs) of 317 MW and biomass projects with an 103 MW aggregate power. At end of 2015, the renewable energy production capacities were accounting for 5.142 MW.

green certificate system, will increase in the next period, under law 220/2008 for supporting green energy will be modified, said the Emil Calota, deputy president of the National Authority for Energy Regulation (ANRE). He added that this will happen after the law in force, No. 220/2008 on the green energy support, will be amended.

The renewable energy producers benefit from free green certificates which they sell on a specialized market for an additional gain against the energy itself. The green certificates are paid for by all consumers in Romania, individuals included, in their electricity bill.

“The Law 220 is no longer valid. (...); (amending it – author’s note) is the oxygen balloon the renewables are waiting for from the authorities. No matter what, an increase of the final impact in the electricity bill will be seen, which is very unpopular. The government, as a technocrat, it perhaps assumes this risk, as it will not be in electoral campaign, but still it is an unpopular matter”, said Calota in a specialty conference.

For 2020, Romania envisages to achieve 24 pct of renewable energy in the gross final consumption. Data of the Eurostat European statistical office show Romania already achieved this in 2014. The European Commission has set the average target for the renewable energy in 2030 in the European Union at 27 pct.

More subsidies for green

The contribution paid by consumers for renewable energy, through the

The increase will be an “unpopular matter”, but the technocrat government takes this risk, said Calota. He didn’t mention by how much the electricity bill would increase. According to sources in the sector, the contribution will go up from RON 42 (EUR 9.3) per MWh to RON 52 (EUR 11.5) per MWh.


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Calota also said that Romania needs to define the renewable energy targets that it will take responsibility for before the European Commission for 2030.

Reduced incentives

For the past two years, the local renewable sector has been grappling with reduced incentives and unclear legislation, say investors, who warn that, on this backdrop, it will be difficult for the country to attract new projects. This stark outlook comes after years of booming growth, which have translated into approximately EUR 6 billion worth of investments. According to an E&Y survey, the Romanian wind power industry has posted RON 4 billion (EUR 900 million) losses in 2014 and 2015. The survey, titled “Analysis of the financial performance and of the balance sheet of wind power industry in Romania” was commissioned by the Romanian Wind Energy Association (RWEA). The survey, drafted exclusively using information provided by companies to the Registry of Commerce, reveals “worrying results for investments in the field of wind

power energy which, totaling around EUR 5 billion, represent by far the most

The Law 220 is no longer valid. Amending it is the oxygen balloon the renewables are waiting for from the authorities. An increase of the final impact in the electricity bill will be seen – Emil Calota, vice president of the National Authority for Energy Regulation

important investment in the Romanian energy system after 1989”, according to a press release sent by the RWEA. Moreover, RWEA warns, the renewable energy sector is in financial deadlock. Thus, in the two years analyzed, the value of assets dropped sharply by RON 4.1 billion. In addition, the association points out, the repayment of loans took on to build wind power plants is 30 years, while the shelf life of a plant is 20 years. According to Claudia Brandus, RWEA President, “the wind industry, like, in fact, the entire renewable energy sector, is suffering. The investors are stuck in a revolving door: they continued to gather losses in 2015, their assets are devaluing, they reached the point where the repayment of loans took on to build wind power plants is 30 years, while the shelf life of a plant is 20 years. The proof is in the E&Y survey”, she said. The reason behind the dire situation is represented by the numerous legal changes, most of the time drafted without impact assessment studies and analyses, RWEA argues.


Legal insight Kostadin Sirlestov*

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THE PRIVATIZATION OF THE BELENE NUCLEAR POWER PLANT

Financing of nuclear power plants in the current global climate is challenging, but it is even more challenging, if at all possible – in liberalized electricity market economies. The World Nuclear Association points out that today there are some 440 nuclear power reactors operating in 31 countries, with over 60 power reactors currently being constructed in 13 countries, notably China, South Korea, UAE and Russia, neither of which has a fully liberalized electricity market. The challenges in the nuclear new built in Finland1 and Slovakia2 over the recent years have been well documented and are a clear showcase of the type of challenges the nuclear new built projects are facing.

The first attempt

The Belene NPP project in Bulgaria has no shortage of challenges itself. The discussions on constructing a second Bulgarian nuclear power plant started in the early 1970s, with the Belene site being approved in 1981. The foundations were laid in 1987 and by 1990 some 40% of the construction work and 80% of the equipment for Unit 1 was completed and supplied. The project was abandoned in 1990 following the political and economic changes in CEE in order to see the project being re-vitalized in 2002 for two reactors with total capacity of 2000 MW. In 2005 the Bulgarian National Electric Company launched a procedure for selection of an EPC Contractor with Atomstroyexport and Bulgaria’s National Electric Company signing the contract early in 2008. In 2006, several Western banks were approached to finance Belene. Over a dozen banks including Citibank, Credit Suisse, Deutsche Bank and UniCredit found the project too controversial and therefore turned down funding applications3. An international competition to select a strategic partner

for the Belene project has narrowed down to a shortlist of two potential owners of 49% of the project rights RWE and Belgium’s Electrabel, with the final decision made in October 2008 announcing RWE as the winning bidder. During the following 16-months of intense negotiations between RWE and Bulgaria’s National Electric Company, the two parties could not sign the final shareholders agreement and the first attempt for partial privatization of the Belene NPP collapsed. While the French bank BNP Paribas has agreed to act as the project’s financial advisor, it has refused to participate in the projects financing alongside with other international financial institutions. With increased concerns on the feasibility of the Belene project, in the beginning of 2011 the Bulgarian Government and the Bulgarian Energy Holding instructed HSBC to undertake a feasibility study/financial assessment for the project. A summary of the findings of the bank were uploaded on the website of the Bulgarian Ministry of Energy and demonstrated that the financial exposure as a result of the Belene project was


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much bigger than the initial estimates. This and various other factors led to the official termination of the Belene project in March 2012. On 29 March 2012 the Bulgarian Parliament passed a Resolution on the “termination of the construction of the nuclear power plant on the Belene site” citing various reasons for this decision, including: “the danger for seismic risk at the Belene site following the Fukushima disaster”, “unproven feasibility and unavailability of budgetary funds”, “putting the priority to the energy efficiency” and others. This resolution is also empowering the authorities to consider the construction of gas fired power plant at the Belene site and also to re-vitalize the construction of the new unit at the existing Kozloduy NPP. The very shortlived attempt of structuring the Kozloduy NPP Unit 7 project with Westinghouse on direct negotiations coincided with the international arbitration case brought forward by Atomstroyexport against Bulgaria’s National Electric Company for the alleged failure of the Bulgarian company to pay under the signed EPC contract. Originally Atomstroyexport

took Bulgaria’s National Electric Company to international arbitration in July 2011 over the non-payment of €58 million ($74 million) related to works on the proposed Belene plant, which the Russian supplier said had been certified by both parties as complete. Following the decision of the Bulgarian Government and the Bulgarian Parliament to cancel the Belene project in 2012, the amount of the claim was increased to €1 billion ($1.3 billion) to take into account the work it had already done towards the construction of the Belene plant before the project was cancelled. Not to a great surprise, in June 2016 the arbitration award was announced - the Paris-based International Court of Arbitration of the International Chamber of Commerce8 has awarded Russian engineering company Atomstroyexport about €550 million to be paid by Bulgarian National Electric Company for an abandoned Belene nuclear power project. Being the first major international arbitration award against a Bulgarian state-owned company, the Belene award

caused seismic reaction in Bulgaria. Nevertheless, the political parties in the Bulgarian Parliament agreed on the need for honoring the international arbitration award and adopted a special Bill for providing financial support to the Bulgarian National Electric Company for the purpose of payment under international arbitration case – ICC Case 18086/GZ/MHM. Currently this Bill is awaiting notification from the EU Commission following which the Bulgarian Ministry of Finance is ready to make sure that the debt is being paid by the end of 2016. In his statement before the Bulgarian Government the Minister of Finance of Bulgaria Mr. Vladislav Goranov was clear in stating that he is paying these funds for the purchase of certain assets and how the assets will be used, this is the job of the Ministry of Energy to figure out. Hence the second idea of privatization of the Belene NPP, with “no state guarantee and no support from the state” by means of forming an SPV where all the assets and licenses will be gathered with the hope that there will be a private investor turning up, bidding


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for the shares in the SPV (ideally for or above of the value of the investment by the Bulgarian state made so far), structuring the financing and building the plant. Highly unfortunately, the idea for such a type of privatization will be unable to bring the necessary investments to the project and is destined to fail.

landmark case of Hinkley Point C NPP in the UK5. This structure is furthermore in line with the recommendations made by the World Bank to the Bulgarian Government in relation to the electricity market reform to the country, which are about to be published and discussed with the local stakeholders6.

The second attempt and the modern way forward

The starting point in the modern structuring of any nuclear power project in the liberalized environment of the EU requires at least the following:

Now, some 15 years after the restart of Belene NPP project it is worth considering the plans demonstrated by the Bulgarian nuclear establishment back then with the intention, which was shared in 2001/2002 to “spend 2 billion Euros so that no one could stop the project”. Regrettably, this is exactly where the Belene project currently stands and any misinformed attempt for privatization will lead to some unintentional support to this fraudulent long-term strategy. First and foremost, the second Belene privatization attempt, if it is aimed on achieving tangible results, should consider the modern way forward for the development of new nuclear built projects. This structure, based on the Electricity market reform in the UK with the crucial concepts of Contracts for Difference (CfD) and Strike price (SP), was recently approved by the EU Commission, most notably in the

– Contract for Difference (‘CfD’) providing revenue support during the operational phase of the project7; in the case of the UK the CfD for the new nuclear project is set at 35 years. – Pre-determined Strike Price (‘SP’) ensuring that the NPP project company will ultimately receive relatively stable revenues, subject to its selling strategy and the amount of output it produces; SP for Hinkley Point C NPP project was set at GBP 92,50 per MWh in 2012 nominal prices and is currently exceeding GBP 100,00, as the SP is fully indexed to the Consumer Price Index. – The modern structure of new nuclear built in the EU not only benefits from the CfD, but also from a State Credit Guarantee on the debt the project company issues (the ‘Credit Guarantee’);

in practice it represents a state guarantee. – There is no unauthorized state aid (following the necessary state aid clearance from the EU Commission) in the structure regarding nuclear plants, due to the following: there are two market failures which are more relevant specifically to nuclear energy: (i) investment in nuclear energy is subject to significant risk given the combination of high upfront capital costs, long construction times and a long period of operation to recover the investment costs; nuclear energy production has extremely long and complex life cycles, unlike most other energy infrastructure and indeed unlike most infrastructure investments in general; and (ii) there is the risk of (predominantly political) ‘hold-up’ once the investment is made and the investor is in a weaker bargaining position. These issues are unique to nuclear technology and the EU Commission finds that “there is significant uncertainty around the issue of whether private investment in new nuclear would take place in the absence of State aid, with dates ranging from the early 2030s to not earlier than 2049”. On the basis of the above the EU Commission found in the case of Hinkley Point C project that “the Commission therefore concludes that the proposed State aid measures are necessary”.


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The most important and appropriate feature of the CfD scheme when applied to new nuclear plants is the predictability of the investment costs, the SP and the other elements of the potential investment. As we are all well aware, the Hinkley Point C project brought quite some debate in the UK society over the feasibility in making new nuclear investment vs other alternatives. The Electricity market reform8 concluded the three basic ground for the development of the electricity in the future being: (i) security of supply (“to keep the lights on”), (ii) no carbon emissions (renewables and nuclear) and (iii) affordability9. Based on the above, it is somewhat evident that dumping the permits, assets and existing equipment of Belene NPP project into one company and expecting a miracle investor to show up as a result of a traditional privatization effort is not going to meet the purpose, if it is related to the completion of the project. The likelihood of completion of Belene NPP project being anyhow narrow given its history and challenges can be increased

just only if the tender for its privatization is based on the modern way forward. It includes: (i) CfD and CP system introduced to the Bulgarian legislation, combined with strong commitment by the Bulgarian state to the potential future investor; (ii) notification to the scheme and the results with the EU Commission in light with the positive precedents, which have been already established; (iii) organizing an open tender in the light of the ones, which have been completed in the UK once the legislative reform has been completed with a clear focus on the lowest CfD; (iv) as the results of this potential tender will certainly be surprising for the Bulgarian society and the political parties (35+ years of CfD and 250+ BGN/MWh SP, etc.) it is then when the strategic decision has to be made based on the availability of the information for the project. Probably then it will be the right time for the Bulgarians to hold a second referendum – for or against this investment. Even if the result is negative, the financial consequences will be somewhat narrower in comparison to other alternatives.

* Kostadin Sirleshtov – Partner, CMS Cameron McKenna LLP Law Firm, Bulgaria Branch 1 The cost overrun for the Finish Olkiluoto Unit 3 is considerable, to about €8.5 billion and Areva has already made provision for write-down of €2.7 billion on the €3.3 billion project in its accounts, though in mid-2014 Areva’s losses to completion were €3.9 billion. 2 In 2006, Italian utility ENEL acquired a 66% stake in Slovenské Elektrarne. In December 2015 it was reported that ENEL had agreed to the sale of its Slovenské Elektrarne equity to Czech-based energy company Energeticky a Prumyslovy Holdings (EPH), in two stages: initially 33% then the balance on completion of the Mochovce Units 3&4 project. The budget has already risen to 4.6 billion euros, from an original 2.8 billion euros. 3 More on the history of the project and the attempts to structure the financing of the Belene project could be found at: http://www.banktrack.org/download/rwe_and_ belene/090409_belene_briefing_urgewald.pdf 4 ICC Case 18086/GZ/MHM 5 COMMISSION DECISION (EU) 2015/658 of 8 October 2014 on the aid measure SA.34947 (2013/C) (ex 2013/N) which the United Kingdom is planning to implement for support to the Hinkley Point C nuclear power station - http://eur-lex.europa.eu/legal-content/EN/ TXT/?uri=CELEX%3A32015D0658 6 http://www.cms-lawnow.com/ealerts/2016/06/worldbank-issues-final-report-on-the-bulgarian-electricitymarket-reform 7 http://europa.eu/rapid/press-release_IP-14-866_en.htm 8 Electricity Market Reform (EMR) is a UK government policy to incentivise investment in secure, low-carbon electricity, improve the security of Great Britain’s electricity supply, and improve affordability for consumers. 9 https://www.gov.uk/government/publications/2010-to2015-government-policy-uk-energy-security/2010-to2015-government-policy-uk-energy-security#appendix-5electricity-market-reform-emr


Oil & gas

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COMPRESSED NATURAL GAS IN GREECE & THE WORLD CNG is integrated into the everyday life of private and professional drivers, authorities, enterprises and public services, while its use is “broadening” into shipping and means of public transportation.


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A familiar image for those moving around Athens is the Athens Road Transport buses, the taxis and the garbage trucks of the municipality of Athens powered by natural gas, a trend that extends allover Greece. In Thessaloniki, many taxis run on the green fuel, while at Ioannina the infrastructure expansion is being launched in order to serve the urban bus company buses and other vehicles powered by CNG. In Larissa, official vehicles of the municipality run on natural gas, while the station network is expanding and the existing network stations in Thessaloniki, Volos, Lamia, Larissa and Attica are also growing rapidly. Investments to bring natural gas to all regions of Greece are included in DEPA’s strategic plan, which has been investing in infrastructures to pave the way for CNG ie. gas moving vehicles allover Greece (Western Greece, the islands, etc.).

European and Greek market. The most famous models also come in CNG versions, and their range is constantly expanding with new models appearing on the Greek and international market.

New CNG versions on the Greek and European market

Conversion of gasoline vehicles to dual fuel ones

Private cars and commercial CNG models from all major automobile industries are circulating both on the

The use of natural gas in vehicles with gasoline engines is now quite widespread abroad and the technology

There are already known automobile manufacturer CNG vehicles circulating on the Greek roads such as Fiat (Fiat 500L Natural Power, Fiat Qubo 1.4 70 PS, Fiat Punto 1.4 70 PS, Fiat Panda, Fiat Doblo 1.4 T-Jet 120 PS), Audi (Audi A3 Sportback g-tron), Mercedes Benz (B Class 200, E 200 NTG, Benz Sprinter NGT), Lancia (LanciaYpsilon 0.9 TwinAir), Piaggio, Iveco (Iveco Daily, New Strails), Volkswagen (VW Golf 1.4 TGi , Passat 1.4 TSI 150 PS EcoFuel, Eco Up, Caddy Vann Ecofuel), Seat (Seat Leon 1.4 TGI 110 PS, Mii Ecofuel), Skoda (Octavia G-TEC, Citigo), Opel (Opel ZafiraTourer 1.6 CNG Turbo, opel Combo 1.4 T-Jet 120 PS) and Honda (Civic Natural Gas).

of combustion gas and alternative fuel is known as bi-fuel technology. In Greece, where the law now allows the conversion of gasoline vehicles as well as diesel engines to dual fuel gas, converted vehicles have already circulated which present very good performance in fuel economy, performance and emissions reduction. Furthermore, thanks to technological developments in recent years the use of natural gas in combination with diesel in diesel engines of heavy vehicles has been made possible. In this case the two fuels are combusted simultaneously in proportions which meet the requirement of the engine at every moment, depending on the pressure of the gas pedal. This technology, which is called dual fuel, combines the best engine in an optimal and most noble fuel.

Advantages of using natural gas in private use vehicles • Fuel saving of up to 60% compared to other fuels • Zero microparticles PM emissions


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CNG extends all over Greece

• The use of natural gas positively contributes to achieving the European target for energy saving and responds to the EU requirements on launching

CNG around the world at a glance… • 40 million natural gas vehicles will be circulating around the world by 2025. • 40.000 gas refueling stations will have been built by 2026. • The best known models of the automobile industry already circulate in CNG versions. • During the 2015-2025 period, the market for natural gas vehicles is expected to increase by 5% -7% annually. • Governments, institutions and companies collaborate on the development of the natural gas infrastructure.

• Logistics service companies, multinational and other companies that have business fleets to transport goods are using CNG vehicles. • The large UPS group recently invested $ 100 million to fund 12 natural gas refueling stations, and will add 380 trucks to its fleet. • The Dallas Fort Worth airport in North America invested in natural gas vehicles and is one of the 23 worldwide that has achieved a “Carbon Neutral status” reaching the highest environmental level for an airport.

incentives in order to reduce dependence on oil. • It has more energy than other fuels (1 kg of natural gas movement is the energy equivalent of 1.5 liters of gasoline, 1,3 liters of oil and 2 liters of LNG). • Natural gas CANNOT be tampered with as it is provided under pressure through special pipelines directly from the national transmission system at the fuel pumps. • With the use of natural gas -25% CO2 are emitted, -35% microparticles, 75% aromatic hydrocarbons and -53% of nitrogen oxides (NOx) compared to unleaded petrol.


Fuel market Kostas Voutsadakis

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GREECE: NO CHECKS IN FUEL SMUGGLING A significant decline of more than 50% in fuel adulteration rates as well as the limitation of the number of checks appears in the annual report of the General Chemical State Laboratory of Greece for 2015.

Market sources believe that the limitation of the fraud rate is most probably due to the “modernization” of illegal circuits that continue to remain active in the market. More specifically, the shift in misconduct from the adulteration to “incomplete” pump deliveries that actually “steal” fuel from the consumers, which (especially after the installation of the input-output fuel control systems) are now carried out by electronic methods. This is an occurrence that the Ministry of Economy is trying to face with stricter penalties and closing legislation loop holes that allow professionals while are being caught “stealing gas”, to return and be operative on the market. However, experience has shown that the illegal circuits are always one step ahead of law enforcement.

Diesel: the most adulterated fuel

According to the figures of the General Chemical State Laboratory, in 2015, 1.131 samples were examined, out of which 90 (8%) were off specification rates, a percentage that is the lowest in recent years, while the decline in the number of checks is also important. For example, in 2011 2.605 checks had been carried

out and the adulteration percentage stood at 21.04%, which means that one in five samples was adulterated. The report of the General Chemical State Laboratory noted that the largest irregularity – adulteration rate was confirmed regarding diesel fuel, which is mainly adulterated with heating oil or with illicit trafficking oil (fraudulent), and that due to high taxation rates (representing over 50% of the total value) there is a strong motive for product adulteration and therefore consumer deception and, simultaneously, reduction of state revenues. The Laboratory records more or less... 21 different reasons for fuel irregularity... the most popular of which being the adulteration of diesel with shipping or heating oil, even with mineral oils or even water, while unleaded gas is adulterated with heavier fractions. Irregular samples were also identified in the armed forces. The shifting of misconduct from adulteration to fraudulent theft (underweight deliveries) forced the Ministry of Finance to submit a legal provision to the Parliament for stricter


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penalties regarding “tweaked” fuel pumps by increasing fines, closing down businesses and ban the business operator and his/her relatives of up to second degree from reappearing actively on the market a decade. The last provision was provided for as it was found in practice that the wrongdoers return to the fuel market “via the rear door” (their relatives appearing as company owners).

Penalties for offenders

Specifically, the amendment voted for provided for the following: – Whoever alters measurement instruments, software or indications of measuring instruments shall be punished with at least six months’ imprisonment. The same penalty applies if signs of alterations in measurement systems, software, etc are detected. – If “tweaked” pumps are identified, the means of fraud or alteration are

confiscated and a fine of 30.000 Euros is imposed on the business operator for each fuel indicator. Simultaneously, the operating permit is obligatory and permanently removed. Granting a new similar operating license is not allowed for the offending individual or anyone associated with the company’s operation, in which the misconduct was identified in either in person or regarding a spouse or relatives thereof up to the second degree, or regarding any legal person which the offender or his/her spouse or up to second degree relatives are involved in the administration by any means, or in the corporate capital at a percentage of least 50%, for a period of ten years after the removal of the operating license. Until now, in cases of large deviations in the range of more than 1.5% for gasoline and over 3% for LPG, only of the removal of the operating license for the installation was imposed. Now, an additional fine of 30,000 Euros and the prohibition of any similar activity for a decade is also imposed.

Comparative results of laboratory checks (2009-2015) Time period Total of fuel samples Total of irregularities Adulteration 2009 2010 2011 2012 2013 2014 2015

3268 1838 2605 2857 2080 1418 1131

306 308 548 500 218 167 90

9.36% 16.76% 21.04% 17.50% 10.5% 11.8% 8%

It must be noted that since 01/11/2013 there has been a transfer of responsibilities of screening from the Body for the Prosecution of Economic Crimes to the General Secretariat of Public Revenue

– In addition to the above, if incomplete deliveries are detected further to checks, fines are imposed graduating according to the degree of deviation. More specifically: 1. For any error of 0.5% to 1% in gasoline and oil and 1-2% in liquid gases, the fine is 10.000 Euros for each meter. 2. For any error of 1% to 1.5% in gasoline and oil and 2-3% in liquid gases, a fine of 20.000 Euros is imposed for each meter. 3. For any error over 1.5% in gasoline and oil and over 3% in liquid gases, a fine of 30.000 Euros is imposed for each meter. – In the last two cases, namely when there are large deviations the operation permit is also removed and restrictions are applicable to the issuance of any new permit to relatives etc. – Whoever manufactures or trades the fraudulent product can be punished by imprisonment and an administrative fine of 100.000 Euros. The permanent removal of the operation permit for authorized installation and configuration of the pumps applies in case of relapse. – Hindering controls is punished by imprisonment. – Repetitious or habitual violations are punished with at least three years of imprisonment.


Overview

18 50

OIL & GAS SECTOR RELEASES MID YEAR FIGURES The Romanian natural gas transmission system operator (TSO) Transgaz ended the first six months of 2016 with a net profit of Lei 281.77m (€63.2m), down by 12.3% from last year’s Lei 321.5m for the same interval, as a result of a drop in gas transportation revenues and a growth of exploitation expenses. Nevertheless, the net profit is 47% higher than foreseen by the company. Transgas’s total revenues went up 4% y-on-y to Lei 926.151m (€208m), while the turnover had a slight decrease from Lei 821m (€185m) in 2015 to Lei 815m (€183m) in 2016.

Revenues from domestic gas transport dropped 4.5% y-on-y to Lei 632m (€142m), while those of international transport grew by 1.2% y-on-y to Lei 160m (€36m). Transgaz had registered a 9% decrease of the gas quantity transported to 5.873bcm, 0.55 bcm lower than the planned quantity. Exploitation expenses increased sharply by 19% y-on-y to Lei 567m (€127m), because of internal technological consumption, transport network technical losses, and other OPEX increases. Transgaz made investments worth approximately Lei 38m (€8.5m) out of Lei 722m (€162m) planned for the entire year 2016. State-controlled oil TSO Conpet ended the first half-year with a Lei 37m (€8.3m) net profit, up 6% y-on y. Turnover decreased 0.5% to Lei 187.5m (€42.1m) at the same period, because of declining domestic transport revenues, although the National Agency for Mineral Resources (ANRM) increased, as of 9 February 2016, the domestic oil transport service tariff

charged by Conpet by 1.4% to Lei 79.75/ ton (before VAT). Conpet transported 3.45 mt of oil during the first six months of the year, up 1%. State-controlled oil port-operator Oil Terminal posted Lei 14.5m (€3.24m) net profit, a 41.4% increase compared to same period in 2015. The company’s turnover in the first six months of 2016 reached Lei 78.6m (€17.6m). As of June 30th, the pending adjustments for the depreciation of tangible assets were cancelled with revenues from asset depreciation and frozen investment of Lei 1.1m (€0.25m). State-controlled gas producer Romgaz posted a Lei 615.3m (€138.2m) net profit, down 20% y-on-y. Turnover also went down 17.23% y-on-y between January-June 2016 to Lei 1.84 bn (€413m). Romgaz revenues dropped by 15% y-on-y, to Lei 1.9 bn (€427m). According to Romgaz, the results were influenced by a 6% decrease in gas demand on the Romanian market, compared to the first half of last year. Romgaz’s production dropped 20.9%


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to 2.19 bcm due to warm weather and a drop in natural gas demand by the fertilizers industry. The company’s results were below market expectations, as the value of shares dropped 1.8% on the day of the results’ announcement.

same period compared to JanuaryJune 2015 to Lei 7.19 bn (€1.6 bn), on account of low oil prices and lower gas sales partially compensated by larger electricity sales. EBIT amounted to Lei 561m (€120m), 56% below the result posted in the first half of 2015.

On the plus side, Romgaz announced a new hydrocarbon discovery in block RG.06 Muntenia Nord-Est, in the northeastern part of the Moesian Platform, in the Caragele structure. Production tests carried out at exploration wells Damianca 55 and 77 Rosetti confirm the presence of an important hydrocarbon accumulation in Jurassic calcareous reservoirs on a 120 meters interval, located at a depth of over 4,000 meters. The contingent resource, evaluated based on drilling data (well geophysics, cores, fluids and size of the trap according to 3D seismic) is estimated at 150 to 170m boe.

Transgaz made investments worth approximately Lei 38m (€8.5m) out of Lei 722m (€162m) planned for the entire year 2016

OMV Petrom, Romania’s largest O&G company, posted a 61% y-on-y loss in net profit for the first six months of 2016, at Lei 405m (€90m), compared to Lei 1.04 bn (€234m) in the first half of 2015. Sales went down 18% in the

The company’s results were severely impacted by the drop in oil prices in the first months of 2016, outweighing improved operational performance and measures to reduce both operating costs and capital spending, according to the

company’s CEO, Mariana Gheorghe. Against the background of persistently difficult market conditions, the group continued to reduce its investments. OMV Petrom invested Lei 1.33 bn (€299m) in developing its operations in the timeframe, down 35% y-o-y, while the overall 2016 investments are expected to be 20% lower than in 2015. Nevertheless, a €550m investment has been announced in the redevelopment of four oil fields (Preajba Cartojani, Turburea Bibesti, Independenta-phase 2 and Phoenix-phase 2). This is expected to unlock additional oil reserves from these deposits estimated at 40m boe, as OMV Petrom expected a 4% drop in production because of field depletion. Rompetrol Rafinare, part of KazMunayGas (KMG) International, registered a 23% y-on-y increase in consolidated net profit in the first six months of the year, to $22m (€19.7m). Consolidated turnover (counting Rompetrol Rafinare and its subsidiaries Rompetrol Downstream, Rompetrol Gas, Rompetrol Quality Control, Rom Oil, Rompetrol Logistics and


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According to ANRE, in September gas imports will reach about 30% of domestic consumption, because of low prices on international markets

Rompetrol Petrochemicals) dropped 14% y-on-y from $1.9 bn (€1.7 bn) in 2015 to $1.7 bn (€1.5 bn) in 2016 while EBITDA increased 60% y-on-y to $90m (€80.7m). The Kazakh group KazMunayGas International registered a $3.2 bn (€2.8 bn) turnover, while EBITDA amounted to $104.6m (€93.6m), a 28% increase y-on-y.

of total retail sales volumes (including liquefied petroleum gas and lubricants) to 311,000 tons due to favorable economic climate. Diesel sales went up 16% y-on-y to 223,000 tons, whereas gasoline sales went up 13% y-on-y, to 78,000 tons. The Hungarian company has 202 filing stations in Romania and might open another 11 by the end of 2016.

Positive outcomes were supported by the larger throughput at the Petromidia and Vega refineries. Maintaining last year’s positive trend, Petromidia achieved yet another historic peak, processing 17,000 tons/day of raw materials in June with an overall increase of 4% y-on-y. On account of higher regional demand, Vega processed 35.800/day tons of bitumen, more than initially estimated – a 9.4% increase y-on-y.

As for the overall natural gas demand figures, Romania imported 222,400 toe of usable natural gas in the first six months of 2016, up from 66,700 tons in the first six months of 2015, according to the National Institute of Statistics (INS). Domestic natural gas production in the same period totaled 3.81m toe, 493,600 toe (11.5%) below the volume of January- June 2015.

An improvement in processing costs, increasing yields, as well as an increase in fuel sales by 10% y-on-y also contributed to the company’s positive results as Rompetrol Downstream opened two new gas stations in the first half of the year and plans to open nine more by the year’s end. The Romanian unit of Hungarian O&G group MOL registered a 16% increase

According to ANRE, in September gas imports will reach about 30% of domestic consumption, because of low prices on international markets. However, household consumers will use price-regulated domestic gas, as the imports will go to large industrial consumers.

Energy Policy Group (EPG), Romanian Energy Market Monitor, July-August 2016


Oil & gas Emilia Damian

19 54

ROMANIAN GAS ON THE STOCK EXCHANGE 40% of the Romanian domestic gas will have to be sold on the stock exchange, the Energy Minister announced.

Currently, only 1.5% of the gas is sold on the stock exchange and the remaining 98.5% is on bilateral contracts, said Victor Grigorescu, the Romanian Energy Minister. The bilateral contracts are banned on the electricity market, because in the past there were corruption issues with them. Nonetheless, starting as of January 2017, at least 30% of the internal gas will have to be sold on the energy stock OPCOM and BRM platforms and the percent will raise to 40% later.

Gas reserves to be depleted

Romania’s proven natural gas reserves will be depleted in the next 9 years, while the oil reserves will last for another 12 years, unless investments are made in prospecting for new resources, the Chairman of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) Artur Stratan said at a press conference in September. “Oil reserves are depleted by 90 percent. We can still produce hydrocarbons in Romania for a limited time, respectively 12 years of oil and 9 years of natural

gas. Without investments, this is how long our onshore reserves will last”, Stratan explained. He also said that over the last two years, low oil prices have put a lot of pressure on oil investments. “Many investment projects were canceled last year and even this year and this will reflect in a lower level of production. The government has admitted it; while Romania used to be a stable country in terms of energy until recently, it will have to import more increasingly. So, instead of subsidizing the Romanian market, we will subsidize industries in other countries. Without these incentives, the local industry will shortly be doomed”, Stratan insisted.

Low oil and gas prices

He added that the energy sector strategy put forth by the Romanian Ministry of Energy is finally taking into account the tax framework in the oil sector and is beginning to differentiate between onshore and offshore, shallow and deepwater drilling, which should be included in the fiscal framework.


55

“If oil prices continue to put pressure on the industry, you will see many return marginal fields and the Government will not know what to do with them. The key to continue the exploitation of these fields is to change taxation and come up with tax breaks in order to continue drilling in a lucrative manner”, he added. In terms of royalties, the representatives of the oil industry have held several talks with the Ministry of Finance in the past few months, but the process stopped after the State Secretary who handled the negotiations left the ministry. The negotiations have to start over with the new government, and the new tax framework will be enforced on January 1st 2018. “The solution is to wait for the election to pass and restart the process at the beginning of 2017 to finalize it mid-year or towards the end of 2017”, Stratan pointed out.

Imported gas is cheaper

He also said that the industry needs a reform of the National Agency for Mineral Resources (ANRM), to employ more

If oil prices continue to put pressure on the industry, you will see many return marginal fields and the Government will not know what to do with them – Artur Stratan, president of ROPEPCA

specialists, create a digital data base and declassify the level of Romania’s soil resources. The ROPEPCA official also explained that natural gas imports are 400 percent higher than last year, because imported gas is cheaper. “Production costs in Romania are pretty high, somewhere between 16 and 18 US dollars per barrel, so we cannot lower the final price. At the same time, let’s not forget that Gazprom produces as much as Romania’s entire output in a maximum of 10 wells in Siberia, so its operation costs can be kept under control”, said Stratan.


Legal insight Dr Yannis Kelemenis*

20 56

ENERGY TRANSACTIONS SCHEME ON FORWARD ELECTRICITY PRODUCTS Statute 4336/2015, which was published on 14 August 2015, provided for the procedure of sale of electricity forward products with physical delivery from the Power Public Corporation (PPC) to electricity suppliers through auctions (so-called “NOME auctions”) in order to strengthen the competition within the Greek electricity retail market and to improve the quality and the price of electricity offered to end consumers.


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On 25 May 2016, under the legislative instructions of statute 4389/2016, the Economic Policy Council adopted the electricity auctions scheme (Government Gazette no. B 1473/25.5.2016) which regulates the requirements for performing NOME auctions and includes details on their design, on the rules governing the auctions of electricity forward products and on the necessary amendments of the current regulatory framework for the introduction of NOME auctions. Furthermore, on 2 June 2016 the Greek Parliament adopted statute 4393/2016 (Government Gazette no. A 106/6.6.2016), which amended certain provisions of statute 4389/2016 to highlight that the aim of such auctions is to secure competition within the energy retail market. Finally, on 30 September 2016 the Regulatory Authority for Energy (RAE) issued the Code of Energy Transactions Scheme on Forward Electricity Products (decision no. 329/2016), which was initially drafted by the Electricity Market Operator (LAGIE). The Code was set under public consultation until 9.9.2016.

Public consultation

During the public consultation introduced by RAE, associations of electricity suppliers and producers expressed their opposition to the Yankee Auction model for the upcoming NOME auctions. Within the Yankee Auction process, successful bidders pay the amount of the top bid made by any participant instead of the amount of their final bid. In particular, the Hellenic Association of Independent Power Producers (ESAI) expressed preference for a method making available transfer ability to international interconnections as it offers transparency to participants. It further pointed out that its members (i.e. power producers with the exception of the PPC) should have the right to purchase electricity at NOME auctions for their own consumption and that they intend to develop electricity supply particularly to small industries as a separate activity. Electricity producers also asked for an upper limit to the electricity amount that may be awarded to each auction participant as well as a reduction to the share to be exported.

The NOME auctions

The new legal framework introduces

quarterly auctions whereby the PPC will sell forward products along with physical delivery to electricity suppliers (so-called “NOME” auctions, after the French acronym for such models). The purpose of this initiative is to reduce, by the end of 2019, the PPC’s retail market share in the interconnected system (electricity sold on islands, which are not connected to the mainland grid is not included) from 95.24% (as of August 2015) to less than 50%. The annual quantity of electricity generated by PPC to be sold at the auctions should gradually increase from 8% in 2016 to 13% in 2019. The upcoming NOME auctions are intended to provide third parties with access to low-cost lignite and hydropower sources, currently owned by the main power utility PPC, as a measure to help break the utility’s market dominance. The NOME-type auctions will last from two to three years, until the electricity market is fully opened, i.e. until the privatisation of PPC and the creation of independent vertically integrated companies. Companies such as


The annual targets of PPC’s retail market share in the interconnected system

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Source: LAGIE

The NOME auctions are intended to provide third parties with access to low-cost lignite and hydropower sources, currently owned by the main power utility PPC, as a measure to help break the utility’s market dominance

Elpedison, Protergia, Watt & Volt and Green, which are already active in the Greek energy supply market, are expected to participate in the above auctions in their effort to develop more competitive prices (as compared to those of the PPC) and broaden the services /offers to low and medium voltage consumers.

Responsibilities of LAGIE

The auctions will be organized by the Market Operator (LAGIE). In the framework of auctions of forward electricity products, LAGIE shall be responsible for actions such as the registration of PPC and the eligible electricity suppliers to the Registry of Participants in the Auctions, collection of fees from electricity suppliers, publication of table of participants, report and submission of the auction calendar for approval to RAE, the conduct of the

auction and the publication of the results of the auction.

Technical characteristics

Forward products auctioned must have the technical characteristics determined by decision of RAE. In particular, RAE must determine upon the recommendation of LAGIE the annual quantity of forward products to be auctioned, expressed in MWh/h. The term of forward product shall be fixed at twelve months and is expressed in hours. The overall energy volume, expressed in MWh, is obtained by multiplying the quantity and the term of forward product. For instance, the quantity of auctioned energy for 2016 is expected to be 460 MWh/hour (for two separate products 200 and 260 MWh, respectively) and the total energy volume 4,036,235.84 MWh.


Dr Yannis Kelemenis

59

The reserve price of forward product shall be determined by a methodology following the proposal of RAE, expressed in €/MWh/h. The reserve price, pursuant to article 139 of statute 4389/2016, comprises the mixture of variable lignite and hydro production costs of the PPC production units. The variable lignite costs will be formed from the following costs: variable costs of PPC’s mines on the basis of the company’s financial data, cost of the purchase of fuel from third parties, special levy for lignite, special initiation cost, variable costs of operation and maintenance and costs of purchasing of CO2 emission rights.

Register of participants in NOME auctions The participation in NOME auctions is made through the registration of participants with the Register of Participants of Energy Transactions System (Auctions) of Forward Electricity Products. This Register includes the Register of Vendors of Forward Electricity Products and the Register of the Suppliers and Traders of Forward Electricity Products. Only the Power Public Corporation (PPC) participates in the Register of Vendors of Forward Electricity Products, in accordance with statute 4389/2016. Moreover, only the licensed electricity

suppliers and traders registered in LAGIE’s Register of Participants of the Day Ahead Market can participate in the Register of Suppliers and Traders. On the other hand, PPC and industrial consumers, who are licensed suppliers of electricity registered in Register of Participants of the Day Ahead Market and the eligible customers of electricity for their own consumption, cannot participate in the Registry of Suppliers. Regarding the industrial consumers covering a major part of the supply market, the new legal framework provides that they can participate in the NOME auctions under strict conditions. In particular, they should represent customers from the category of household low-voltage consumers to medium – voltage under 13 GWh at least for two months. If they do not comply with this, then they will be deleted from the Registry.

Following the registration, the eligible participants conclude the so-called “Additional Contract of Energy Transactions System (Auctions) of Forward Electricity Products” with LAGIE. The main obligation of suppliers and traders is to offer all the necessary guaranties and to repay the respective charges, such as the State fee. On the other hand, PPC should sell forward electricity products in accordance with the auction’s conditions, ensure the physical delivery of energy and accept the financial transactions associated with the auctions. Furthermore, the suppliers purchasing products at the auctions (primary market) may further sell them on the secondary market of subproducts with the monthly duration further divided into daily and hourly products. The products in the secondary market may be sold to other suppliers, traders or may be exported.

The registration procedure

As provided for in the Code, in order for interested suppliers and traders to participate in NOME auctions, they must first apply to LAGIE and file any necessary documentation five days before the auction in question. Within five days from the time of submission, LAGIE must decide on the registration of eligible participants to the Register.

* Dr Yannis Kelemenis is the managing partner of Kelemenis & Co. Law Firm.


Legal insight Dr Lorenc Gordani*

21 60

ENERGY TRADING, TREND OF TODAY POWER OF TOMORROW Albania is living up to its commitments regarding the implemantation of the Third Energy Package by having adopted the new electricity market model in 13 July 2016. The country is actually enter in a stepwise process on establish of Power Exchange.

Lately, the Authority of Energy in Albania (ERE) licensed as TSO the Transmission System Operator (OST) on 15th August 2016. It is expected soon enough Council of Ministers (GoA) Authorisation’s for the Ministry of Industry and Energy (MEI) and OST to start procedures (to formally build up an working group) for the establishment of the Albanian Power Exchange (ApeX), which will initially be owned on its majority by OST and should for an intermediary period be managed by a service provider on behalf of the ApeX. Within one month after its establishment, the ApeX shall become signatory to the Memorandum of Understanding (MoU) of Western Balkan 6 on Regional Electricity Market Development and Establishing a Framework for other future Collaboration and assume all rights and responsibilities resulting thereof in particular the cooperation within the Programme Steering Committee on Market Coupling. This step shall support the timely integration of the Albanian day-ahead electricity market into the regional and pan-European one.

The procedure

The establishment procedure and ownership structure of the Power Exchange shall take due account of best practice examples in the European Union and the Energy Community, where functional operators are assuming co-ownership of the company, and in turn promote the quality and stability of services, improve the reputation of the Albanian trading place, and ensure longterm financial stability. The Secretariat of the Energy Community will support the Power Exchange as well as other authorities and market participants in this respect. Finally, at the end of June 2017, the PX shall be ready to commence operations of the Albanian power market in line with this Market Model. In its first step, ApeX shall start operation, amongst other, with the collection of bids by market participants, their matching and settlement based on hourly wholesale electricity products. The products tradable at the ApeX shall evolve over time and be developed based on the need expressed by market participants in order to allow them to balance their respective portfolios for


61

Dr Lorenc Gordani

generation, consumption, import and export, and to better integrate into the pan-European wholesale markets.

Energy roadmap

The all above together with the Decision of the Council of Ministers on the market model for the regulation of Albania’s electricity market adopted in July 2016, the GoA also adopted a plan on the phasing out price regulation and enabling all market participants to freely trade on the market. An action plan for setting up a power exchange, which envisages the go-live of an organised day-ahead market in the second half of 2017. The planned roadmap for the implementation of the Albanian electricity market foreseen at its first stage, by 1 January 2017, the purchase of 2.655.000 MWh for the clients connected at HV by 1.000.000 MWh, at 35 Kv by 45.000 MWh, at 20 Kv by 310.000 MWh and OSHEE losses by 1.300.000 MWh. A power electricity which will be procured by imported or generation as qualified suppliers for the high voltage grid estimated 1 TWh; 250 GWh volumes from KESH after meeting

the demand from the regulated tariff customers; Independent Producers (like Devoll, Kurumi, Fani) estimated 405 GWh; Imports through traders and/or through import/export zones + other qualified traders estimated 1 GWh.

Within one month after its establishment, the ApeX shall become signatory to the Memorandum of Understanding (MoU) of Western Balkan 6 on Regional Electricity Market Development

In the second stage, as of 1 January 2018, is foreseen an unregulated market for the total amount 5.255.000 MWh. The financial mechanism CfD (Contract for Difference) will be used as a transitional measure that will allow volumes to move from the bilateral contractual arrangements into the ApeX and further be part of the liquidity pool in the market. By using CfDs it will be possible to respect the regulated tariff through the universal supplier obligation that is currently in place between KESH and OSHEE while getting parts of the volume in the unregulated market. In its third stage, as of 1 January 2019, the unregulated market will rise at 6.235.000 MWh. Amount of the volumes foreseen to come from qualified suppliers for the high voltage grid estimated 1 TWh, IPP estimated at 1005 GWh; the remaining from KESH after meeting the demand from the regulated tariff customers estimated 600 GWh; imports through traders and/or through import/export zones + other qualified traders estimated 1,6 GWh; and CfD volumes (from KESH) estimated 2,03 GWh.


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Albania’s market structure needs to be established and organized taking into account all the required segments. The ongoing project to establish an organized electricity market and power exchange needs to be completed within the agreed timeline

As forsaid above the market model envisages the coupling of the Albanian market with the markets of the neighbouring countries. In this regard, for the time given the country will be find well connected with the region and the rest of Europe, where after the commissioning of the 400 kV interconnection with Greece, Montenegro and Kosovo, it is working with Macedonia (2017-2018), and after the one between Tivat and Italy is expected the start with submarine HVDC between Vlora and Italy (2018-2020). Albania participates in the Coordinated Auction Office in South East Europe (SEE CAO) since April 2015 for its border with Montenegro, and since November 2015 for the one with Greece. In October 2015, the transmission system operator OST signed a MoU on a regional security coordination initiative with the transmission system operators of Kosovo, Greece, Bulgaria, former Yugoslav Republic of Macedonia and Turkey. The initiative will introduce a service for coordinated capacity calculation for day-ahead allocations based on regionally coordinated

congestion forecasts. In more, by commissioning the new 400 kV interconnection line with Kosovo in June 2016, the two system operators have already developed and tested a mechanism for procurement of reserve capacity for secondary regulation.

Legislation

Nevertheless, there are a lot of other dimension of liberalisation process that Albania’s energy sector must complete. In regard of the priorities, the development a comprehensive set of secondary legislation, as prescribed by the Power Sector Law, need do be pushed further. The market structure is only outlined by the adopted Market Model and detailed rules governing the electricity market are not developed yet. The same applies for switching rules. Actions for unbundling of OSHEE or deregulation of KESH generation prices are yet to take place. Then the first priority remains the development and adoption of the secondary legislation enforced by the law. The acts which are drafted by ERE in cooperation with the Secretariat


63

need to be adopted as soon as their preparation is complete, without further delay. Albania’s market structure needs to be established and organized taking into account all the required segments. The ongoing project to establish an organized electricity market and power exchange needs to be completed within the agreed timeline. At the same time, the rules for supplier switching and the framework for deregulation of prices in generation and supply and the conditions for access to competitive supply need to be applied without additional delay. Another priority is the unbundling of the distribution activities of OSHEE. The obligations defined in the law for corporate, functional and legal restructuring need to be implemented. In the end, as a expert contracted in the WSH Consultation on a New Albanian Energy Market Design kept at MEI, by professional point of view, the power sector has to be consider as an immense potential in a sustainable developing of all the country. This is an opportunity for Albania to enhance

security of supply, cost competitiveness and emission reductions, in ways that with the actual status quo the country cannot achieve. Then all the market player of the sector should work together to ensure that collective and national measures lead to the development of a fully competitive market in national and regional level. In this regard, it has to be guided by a holistic governance system, which provides for a coherent approach that putt to a competitive level the different technologies. As it stated by the European Parliament along the ratification of the Paris Agreement during last week, the power sector is a global leader in decarbonisation. Electricity is on track to becoming a carbon neutral energy carrier and, if used widely to replace fossil fuels in transport and heating, electrification can lead to more energy efficiency and reductions in greenhouse gas emissions. Then the liberalisation should take place in a cost efficient manner and in this respect a well-functioning electricity market and a robust ETS system is need. Only the combination of an improved regional electricity market design and

an effectively reformed ETS can lead to proper price signals from the relevant markets to drive investments into low carbon technologies. As further development of flexible resources is a necessity, to accelerate the integration and efficiency of shortterm markets. A future proof market design should facilitate the integration of increased shares of renewables and at the same time ensure high level of security of supply. Then for sure can be said that the crucial keys stand only at a well-designed premium (FIT, FIP or CfD) to ensure the required level of security of supply where the energy price signals are not sufficient to keep the necessary capacity online or to drive the necessary investments.

* Dr Lorenc Gordani is Director of Legal Office at the Albanian Renewable Energy Association - AREA


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66 INTERNATIONAL 66 ALBANIA 66 BULGARIA 67 CYPRUS 68 GREECE 70 ROMANIA 72 SERBIA

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INTERNATIONAL DG Energy-European Comission DM 2403/73 Rue J.-A. Demot 24, 1040, Brussels, Belgium Tel.: +32 229 92460 Email: address-information@ec.europa.eu www.ec.europa.eu/energy EWEA 80, Rue d’Arlon, B-1040 Brussels, Belgium Tel.: +32 2 213 1811 Email: ewea@ewea.org www.ewea.org/

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International Energy Agency (IEA) 9, rue de la Fédération, Paris Cedex 15, 75739 Paris-France Tel.: +33 1 40 57 65 00, Fax: +33 1 40 57 65 09 Email: info@iea.org www.iea.org IRENA - International Renewable Energy Agency CI Tower, Khalidiyah (32nd) Street Abu Dhabi, United Arab Emirates Tel.: +971 2 4179000 www.irena.org/ World Energy Council Regency House, 1-4 Warweek Street, 5th floor London, W1B 5LT, United Kingdom Tel.: +44 (0) 207734 5996 www.worldenergy.org

ALBANIA 01. GOVERNMENT INSTITUTIONS Ministry of Energy and Industry Dëshmorët & Kombit Boulevard, 1001 Tirana Tel.: +355 4 22222 45 ext.74111 Email: sekretaria@energjia.gov.al

02. ENERGY COMPANIES Albpetrol sh.a Lagja 29 Marsi Patos Tel./Fax: +342 70 44 14, +342 70 44 13 E-mail: qendra_albp@albpetrol.net www.albpetrol.net Bankers Petroleum Ltd. Lagjja Kastrioti, Rr. Vasil Pecuke, Fier Tel.: +355 34 220845, Fax +355 34 220850 Email: investorrelations@bankerspetroleum.com www.bankerspetroleum.com

03. LAW FIRMS CMS Adonnino Ascoli & Cavasola Scamoni Rr. Sami Frasheri Red Building, 1001 Tirana

 Tel.: +335 4 4302123, Fax: +335 4 2400737 Email: marco.lacaita@cms-aacs.com www.cms-aacs.com, www.cmslegal.com IKRP Rokas & Partners Albania sh.p.k. Donika Kastrioti Str., Palace No. 14, Apartment 7A Tirana, Albania Tel.: +355 4 2267707, E-mail: tirana@rokas.com www.rokas.com/en/

BULGARIA 01. GOVERNMENT INSTITUTIONS Ministry of Economy and Energy 8, Slavyanska Str., Sofia 1052 Tel.: +359 2 9407001, +359 2 940 7545 Email: e-docs@mee.government.bg www.mi.government.bg

Nuclear Regulatory Agency 69 Shipchenski prokhod Blvd, 1574 Sofia Tel.: +359 2 9406-800 Email: mail@bnra.bg www.bnsa.bas.bg

SolarPro Holding 7 Sheinovo str., 1504 Sofia Email: office@solarpro.bg www.solarpro.bg

2. NON GOVERNMENTAL

05. OIL & GAS

Balkan & Black Sea Petroleum Association 2 Hristo Belchev Str., 1000 Sofia, Bulgaria Tel.: +359 2 986 06 85 Email: bbspetroleum@bbspetroleum.com www.bbspetroleum.com

Bulgargas 47 Petar Parchevich Str., 1000 Sofia Tel.: +359 2 935 89 44, +359 2 935 89 88 Email: hq@bulgargaz.bg www.bulgargaz.com

Bulgarian Chamber of Commerce and Industry 9 Iskar Str., Sofia 1058 Tel.: +359 2 987 78 26, +359 2 8117 445 Email: bcci@bcci.bg www.bcci.bg Bulgarian Photovoltaic Association 42 Vitosha Blvd., Floor 2, App. 3, 1000 Sofia Tel.: +359 2 44 222 28 Email: office@bpva.org www.bpva.org Bulgarian Wind Energy Association 7 Paris Str., 5th Floor, Sofia 1000 Tel.: +359 2 4833820 Email: info@bgwea.org www.bgwea.org WWF Bulgaria 38 Ivan Vazov Street, 2nd fl., 3th ap., 1000 Sofia Tel.: +359 29505040 Email: office@wwfdcp.bg www.wwf.bg

03. ENERGY COMPANIES AEC Kozlodui 3321 Kozlodui Tel.: +359 973 7 2020 Email: info@kznpp.org www.kznpp.org/ AES AES Maritza Iztok 1, 72 Lyuben Karavelov Str., Sofia Tel.: +359 42 901 634 Email: peter.lithgow@aes.com www.aes.com Brikel EAD Stara Zagora region, 6280 Galabovi Tel.: +359 8122000 www.brikel-bg.com/ Bulgarian Energy Holding 16 Vesalec Str., 1000 Sofia Tel.: +359 2 926 38 00 Email: hq@bgenh.com www.bgenh.com CEZ 140 G.S. Rakovski Str., Sofia 1000 Tel.: +359 070010010 Email: cez@cez.bg www.cez.bg Contour Global ContourGlobal Maritsa East 3 TPP, Mednikarovo, Stara Zagora 6294 Tel.: +359-42-663-251 Email: me3@ContourGlobal.com www.contourglobal.com

04. ALTERNATIVE ENERGY E.Mirolio EAD Industrial Zone, 8800 Sliven Tel.: +359 44612418 Email: miroglio.lana@emiroglio.com www.emiroglio.com

Bulgartransgas POB 3, Housing estate ”Ljulin-2”, 66 Pancho Vladigerov Blvd, Sofia 1336 Tel.: + 359 /2/ 939 63 00 Email: info@bulgartransgaz.bg http://www.bulgartransgaz.bg Citigas Bulgaria EAD 4 Adam Mitskevich Str. Tel.: +359 2 925 9495 Email: sofia@citygas.bg www.citygas.bg/ DEXIA BULGARIA 9160 Devnya Industrial Zone Tel.: +359 887077077 Email: pola.naydenova@mail.bg Direct Petrolium Bulgaria/TransAtlantic 16 Arh. J. Milanov str., 1164 Sofia Tel.: +3592 963 3244 Email: info@transatlanticpetroleum.com www.transatlanticpetroleum.com/portfolio/bulgaria Lukoil 42, Todor Alexandrov Blvd, 1303 Bulgaria Tel.: +359 2 91 74 316 Email: office@lukoil.bg www.lukoil.bg OMV Bulgaria 1, Sofiiski Geroi Str., Sofia 1612 Tel.: +359 2 93 29710 Email: info.bulgaria@omv.com www.omv.bg Petrol 43, Cherni Vrah Blvd, 1407 Sofia Tel.: +359 2 4960 300 www.petrol.bg Shell Bulgaria 48, Sitniakovo Blvd, Serdica Office, 8 floor, 1505 Sofia Tel.: +359 2 960 1752 Email: smartbul@shell.com www.shell.bg


07. ELECTRICITY TRADERS DANS 120D, Simeonovsko Shose Blvd, 1700 Sofia Tel.: +359 2 42 100 10 www.dansenergy.eu EFG 10, Vihren Str., Pavlovo distr., Sofia Tel.: + 359 2 892 88 08 Email: office@efg.bg www.efg.bg

Cyprus Association of Renewable Energy Enterprises (SEAPEK) 30 Griva Digeni Avenue, 1080 Nicosia Tel.: +357 22 665102 Fax: +357 22 669459 www.seapek.com Cyprus Chamber of Commerce and Industry 38, Griva Digeni Ave. & 3 Deligiorgi Str., Tel.: +357 22 889800 Email: chamber@ccci.org.cy www.ccci.org.cy/

03. INSTITUTIONS Cyprus Institute of Energy 2 Agapinoros & 3 Arch. Makariou, Megaro IRIS, 1st Floor, 1076 Nicosia Tel.: +357 22 606060 Email: cie@cytanet.com.cy www.cie.org.cy

05. LAW FIRMS

Cyprus Energy Agency 10-12 Lefkonos Street, 1011 Nikosia Tel.: +357 22 667716, +357 22 667726 Email: anthi.charalambous@cea.org.cy www.cea.org.cy

Antonis Paschalides & CO. LLC Makarios Ave. & Agias Elenis 36, Galaxias Building, Office 502, Nicosia 1061 Tel: +357 22 661 661 www.paschalides.com

Energy MT 8, Bacho Kiro, 1000 Sofia Email: office@emtbg.com www.emtbg.com/

Cyprus Energy Regulatory Authority 81-83 Griva Digeni Avenue, IAKOVIDI Building, 3rd Floor, 1080 Nicosia Tel.: +357 22 666363 Email: info@cera.org.cy www.cera.org.cy

Christos M. Triantafyllidis 2, Evagorou Str., Irini Megaron, 3rd floor, Office 31-33, 1521 Nicosia www.christriantafyllides.com

OET 38, Bokar Blvd, 1404 Sofia Tel.: +359 2 854 81 38, +359 894 777846 Email: office.bg@oet-energy.com www.oet-energy.com

Cyprus Hydrocarbons Company Ltd 53, Strovolos Ave., Victory Building 2018 Strovolos, Nicosia Tel.: +357 22 203880 Fax: +357 22 311646

EFT 19, George Washington Street, 1000 Sofia Tel.: +359 2 439 9010 Email: enquiries@eft-group.net www.eft-group.net

08. LAW FIRMS CMS Cameron McKenna 14, Tzar Osvoboditel Blvd, 1000 Sofia Tel.: +359 897860421 Email: konstantin.sirleshtov@cms-cmck.com www.cms-cmck.com/Sofia-CMS-CMCK-Bulgaria I. K. Rokas & Partners Law Firm – Branch Bulgaria, I. Rokas 12-16, Dragan Tzankov Blvd., Lozenetz Square, 1164 Sofia Tel.: +359 2 9521131 Fax: (+359 2) 9520680 E-mail: sofia@rokas.com www.rokas.com/en/

09. CONSULTANTS

Cyprus Institute of Energy 2 Agapinoros & Arch. Makariou III, Megaro IRIS, 1st Floor, 1076 Nicosia Tel. +357 22 606060 Fax:+357 22 606001/2 E-mail:cie@cytanet.com.cy Cyprus Transmission System Operator of Electrical Energy 68, Evangelistrias Street, CY-2057 Strovolos Tel.: +357 22 611 611 Email: mail@dsm.org.cy www.dsm.org.cy/ Cyprus Organisation for Storage and Management of Oil Stocks (COSMOS) 27, Heracleous Str., 2nd floor, Office 203, 2040 Nicosia Tel.: +357 22 81 81 00 Email: info@kodap.org.cy www.kodap.org.cy

Energeo 279 B Tzar Boris III Bd, Sofia 1619 Tel.: +359 2 902 6580 Email: office@energeo.bg http://energeo.bg

Ministry of Agriculture, Natural Resources and Environment Louki Akrita Street, 1411 Nicosia Tel.: +357 22 408305 Email: registry@moa.gov.cy www.moa.gov.cy

10. PR

Ministry of Energy, Commerce, Industry and Tourism of the Republic of Cyprus Energy Sector 6, Andreas Araouzos Str., CY-1421, Nicosia Tel.: +357 22867100 Email: perm.sec@mcit.gov.cy www.mcit.gov.cy

AMI Communications 135 B, G.S.Rakovski Str., floor 2, Sofia 1000 Tel.: +359 2 989 5115 Email: office@amic.bg www.amic.bg D&D 54, W. Gladstone Str., 1000 Sofia Tel.: +359 2 866 98 99 Email: office@ddagency.com www.ddagency.com

Natural Gas Public Company (DEFA) 13 Limassol Avenue, Demetra Tower, 4th Floor, 2112 Nicosia Tel.: +357 22 761 761 Email: info@defa.com.cy www.defa.com.cy

CYPRUS

02. SEMI GOVERNMENT ORGANIZATIONS

01. GOVERNMENT INSTITUTIONS Commission for the Protection of Competition (C.P.C) of the Republic of Cyprus 53, Strovolos Ave., 2018 Strovolos, Nicosia Tel.: +357 22 606600 www.competition.gov.cy

Electricity Authority of Cyprus 11 Amfipoleos Str., 2025 Strovolos, 1399 Lefkosia Tel.: +357-22 20 10 00 Email: eac@eac.com.cy www.eac.com.cy

Cyprus Legal Answers 31, Estias Street, Aradippou, 7041 Larnaka Tel.: +357 99 641265, Fax: +357 22 672 333 Email: info@cypruslegalanswers.com www.cypruslegalanswers.com Kyriakides & Xenofontos Tel.: +357 25 352352, Fax: +357 25 352353 www.oilandgaslawyers.eu Michael Damianos & Co LLC 42E, Arch. Makarios Avenue, 1065 Nicosia Tel.: +357 22 021212 Fax: +357 22 021213 http://damianoslaw.com Pamboridis LLC 45, Digeni Akrita Avenue, 1070 Nicosia Tel.: +357 22 752525 Fax: +357 22 752800 Email: info@pamboridis.com www.pamboridis.com

06. CONSULTANTS ANETEL Larnaca District Development Agency 2 Ag. Lazarou Str., 7040 Voroklini Larnaca Tel.: +357 24 815280 Email: info@anetel.com www.anetel.com/ Aristodemou Nicolas 5A, Afxentiou Str., 2ndFloor, CY-1309, Nicosia Email: aristodn@cytanet.com.cy www.nea-consult.com Aspen Trust Group Elia House, 77 Limassol Avenue, 2121 Nicosia Tel.: +357 22 418888 Fax: +357 22 418890 Email: info@aspentrust.com www.aspentrust.com

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BIZSERV 32, Georgiou Griva Digeni Ave., 1066 Nicosia Tel.: +357 22 375504 Fax: +357 22377583 Email: info@bizserve.eu Cba Conquest Business Advisors 176, Athalassis Avenue, CY2025 Strovolos, Nicosia Tel.: +357 22 820800 Email: louismloizou@cba.com.cy www.cba.com.cy/ Kassinis International Consulting Office 502, Kennedy Business Centre 12, Kennedy Ave, Ayioi Omologites, 1087 Nicosia Tel.: +357 22 663280, Fax: +357 22 669469 Email: info@kassinis-consulting.com www.kassinis-consulting.com

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07. OIL & GAS A.M.K. EcoLeaf Ltd - ENERGY MANAGEMENT SYSTEMS 15, Dodekanisou Str., Anthoupoli, Nicosia 2302 Tel.: +357 22 720670 Email: info@amkgroup.eu www.ecoleaf.eu/ BP Eastern Mediterranean Ltd Dekhelia Rd, 6301 Larnaca Tel.: +357 24 812849 Email: Pambos.Lambrou@ec1.bp.com EDT Offshore PO Box 54548, Yermasoyia, Limassol 3725 Tel: +357 25 899000, Fax: +357 25 899002 Email: info@edtoffshore.com www.edtoffshore.com Eni Cyprus Ltd 81-83, Grivas Digenis Avenue, 1090 Nicosia Tel.: +357 22 503232, Fax: +357 22 503001 Email: christiano.salino@eni.com Exxonmobil Cyprus Inc 6 Ag. Prokopiou Str., Eggomi, Nicosia Tel.: +357 22 393101 Hellenic Petroleum Cyprus Ltd 3, Ellispontou Str., 2015 Strovolos Tel.: +357 22 477000 www.eko.com.cy Intergaz Ltd Dhekelia Rd, 6303 Larnaca Tel.: +357 24 821 666 Email: info@intergaz.com.cy http://intergaz.com.cy/ Lanitis Green Energy Group Ltd 107B Nicou Pattichi Str., 3070 Limassol Tel.: +357 25 822314 www.lgeg.com.cy Lukoil Cyprus Ltd 11, Limassol Ave., 5th Floor, 2112 Aglanja, Nicosia Tel.: +357 70001000 Email: lukoil@lukoil.com.cy www.lukoil.com.cy/ Noble Energy International ltd. 73, Metochiou Street, 2407 Egnomi, Nicosia Tel.: +357 22 449190, Fax: +357 22 449208 Email: jztomich@nobleenergyinc.com www.nobleenergyinc.com Synergas Dhekelia Rd, 6303 Larnaca Tel.: +357 24 635286 Total G&P Cyprus 48, Themistocli Dervi, 5th floor, 1066 Nicosia Tel.: +357 22 202806, Fax: +357 22 202801 Email: jean-luc.porcheron@total.com total.com

VTT Vasiliko Ltd (A VTTI Group Company) Oil Storage Terminal, 75 Mari, 7736 Larnaca Tel.: +357 24 257500 Fax: +357 24 333299 Email: xee@vtti.com www.vtti.com

08. ELECTRICITY FALCON ELECTRICITY POWER 135, Omonoias Ave, 8th floor, 3045 Limassol Tel.: +357 25 028560 Email: info@falconelectricity.com http://falconelectricity.com/ ΔΕΗ Quantum Energy Tel.: +357 22 792200 Email: info@dei-quantumenergy.com www.dei-quantumenergy.com

10. ALTERNATIVE ENERGY A.S.G. Solar Technologies Ltd 28, Kinyras Street, Shop A, 8011 Paphos Tel.: 7777 7652 Fax +357 26 822 513 Email: solartech@cytanet.com.cy Aeoliki Ltd 41, Themistokli Dervi Street, 1066 Nicosia Tel.: +357 22 875707 Fax: +357 22 757778 Email: info@aeoliki.com www.aeoliki.com Energy Sequel 3, Costa Loizou Street, Latsia, 2222 Nicosia Tel: +357 96 276761 E-mail: energysequel@gmail.com www.energysequel.com Ergo Energy 47, 28th October Street, 2414 Engomi - Nicosia Tel.: +357 22 505404 Email: pharconides@ergohomegroup.com www.ergoenergy.com.cy

11. PR ACTION GLOBAL COMMUNICATIONS 6, Kondilaki Street, 1090 Nicosia Tel.: +357 22 818 884 Email: natalie.c@actionprgroup.com www.actionprgroup.com Marketway Marketway Building, 20, Karpenisiou Street, 1077 Nicosia Tel.: +357 22 391000 Fax: +357 22 391150 Email: ngavrielides@marketway.com.cy www.marketway.com.cy

12. EDUCATION INSTITUTES

European University of Cyprus 6, Diogenis Str., Engomi, 1516 Nicosia Tel: +357.22.713000 www.euc.ac.cy Levantine Training Centre 5, Spyrou Kyprianou Street, Makedonias Court, Office 401, 4001 Limassol Tel.: +357 25 334250, Fax: +357 25 255262 Email: ltc@shipcon.eu.com www.levantinetrainingcentre.com

GREECE 01. GOVERNMENT INSTITUTIONS Ministry of Reconstruction of Production, Environment and Energy (YPAPEN) 17, Amaliados Str., 115 23 Athens Tel.: +30 213 1515000 Fax: +30 210 6447608 Email: info@ypeka.gr www.ypeka.gr Public Gas Corporation S.A. (DEPA) 92, Marinou Antipa Ave., 141 21 Heraklion Tel: +30 210 2701000, Fax: +30 210 2701010 Email: pr@depa.gr www.depa.gr Hellenic Transmission System Operator (DESMIE) 72 Kastoros Str.,185 45 Piraeus Tel.: +30 210-9466700 Fax: +30 210-9466766 Email: contact@desmie.gr www.desmie.gr Independent Power Transmission Operator (ADMIE) 89 Dyrrachiou Str., 104 43 Athens Tel.: +30 210-5192281, Fax: +30 210-5192504 Email: info@admie.gr www.admie.gr Hellenic Gas Transmission System Operator S.A. (DESFA) 357-359, Messogion Ave., 152 31 Chalandri Tel.: +30 210 6501200, Fax: +30 210-6749504 Email: desfa@desfa.gr www.desfa.gr Hellenic Electricity Distribution Network Operator S.A. (DEDDIE) 20, Perraivou & 5 Kallirrois Str., 117 43 Athens Tel./Fax: +30 210-9281698 Email: infodeddie@deddie.gr www.deddie.gr Centre for Renewable Energy Sources and Saving (KAPE) 19th km Marathonos Ave, 19009 Pikermi Tel.: +30 210-6603300 Fax: +30 210-6603301 Email: cres@cres.gr www.cres.gr Regulatory Authority for Energy (RAE) 132, Pireos Str., 118 54 Athens Tel.: +30 210-3727400 Fax: +30 210-3255460 Email: info@rae.gr www.rae.gr

02. NON GOVERNMENTAL Institute of Energy For South-East Europe (IENE) 3, Alex. Soutsou Str., 106 71 Athens Tel.: +30 210-3628457 Fax: +30 210-3646144 Email: secretariat@iene.gr www.iene.gr


03. FEDERATIONS - UNIONS Hellenic Federation of Enterprises (SEB) 5, Xenofontos Str., 105 57 Athens Tel.: +30 211 5006000 Fax: +30 210 3222929 Email: info@sev.org.gr www.sev.org.gr

04. ASSOCIATIONS Hellenic Union of Industries Consumers of Energy (UNICEN) 57, Ethnikis Antistaseos Str., 152 31 Halandri Tel.: +30 210-6861489 Fax: +30 210-6283496 Email: info@unicen.gr www.unicen.gr Hellenic Wind Energy Association (HWEA) ELETAEN 306, kifissias Ave., 1st Floor, 152 32 Athens Tel./Fax: +30 210-8081755 Email: eletaen@eletaen.gr www.eletaen.gr

05. ELECTRICITY Elpedison Energy 8-10, Sorou Str., Building C, 151 25 Marousi Tel.: +30 211-2117400, Fax: +30 210-3441255 Email: info.energy@elpedison.gr www.elpedison.gr Heron S.A. 85, Mesogion Ave., 115 26 Athens Tel.: +30 213-0333000, Fax: +30 210-6968690 Email: info@heron.gr www.heron.gr M&M Gas 5-7, Patroklou Str., 151 25 Marousi Tel.: +30 210-68777300 Fax: +30 210-6877400 Email: info@mytilineosgroup.gr www.mytilineos.gr Protergia S.A. 8, Artemidos Str., 151 25 Marousi Tel.: +30 210-3448300, Fax: +30 210-3448471 Email: dinos.benroubi@protergia.gr www.protergia.gr Public Power Corporation S.A. (DEH) 30, Halkokondili Str., 104 32 Athens Tel.: +30 210-5230301, Fax: +30 210-5237727 Email: info@dei.com.gr www.dei.gr

06. FUELS Aegean S.A. 10, Akti Kondili Str., 185 45 Piraeus Tel.: +30 210-4586000, Fax: +30 210-4586241 Email: info@aefeanoil.gr www.aegeanoil.gr BP Elliniki S.A. Petroleum 26, Kifissias Av. & 2, Paradissou Str.,151 25 Marousi Tel.: +30 210-6887777, Fax: +30 210-6887697 Email: info@bp.com www.bp.com

Eko AEBE 8, Chimaras Str., 151 25 Marousi Tel.: +30 210-7705201, Fax: +30 210-7705847 Email: info@eko.gr www.eko.gr

Enteka 2, Tichis Str., 152 33 Chalandri Tel.: +30 210-6816803, Fax: +30 210-6816460 Email: enteka@enteka.gr www.enteka.gr

Elinoil S.A. 33, Pigon Str., 145 64 Kifissia Tel.: +30 210-6241500, Fax: +30 210-6241509 Email: info@elinoil.gr www.elin.gr

Gamesa 9, Adrianiou Str., 115 25 Athens Tel.: +30 210-6753300, Fax: +30 210-6753305 Email: gehellas@gamesacorp.com www.gamesacorp.com

Hellenic Fuels S.A. 8, Chimaras Str., 151 25 Marousi Tel.: +30 210-6887111 Fax: +30 210-6887100 Email: info_hellenicfuels@helpe.gr www.hellenicfuels.gr

Schneider Electric Greece 19th klm National Road Athinon-Lamias 146 71 Nea Erithrea Tel.: +30 210-6295200, Fax: +30 210-6295210 Email: gr-info@schneider-electric.com www.schneider-electric.gr

Hellenic Petroleum Group (ELPE) 8A, Chimaras Str., 151 25 Marousi Tel.: +30 210-6302000, Fax: +30 210-6302510 Email: info@helpe.gr www.helpe.gr

Terna Energy S.A. 85, Messogion Avenue, 115 26 Athens Tel.: +30 210-6968300, Fax: +30 210-6968096 Email: info@terna-energy.com www.terna-energy.com

Mamidoil-Jetoil S.A. 27, Evrota & Kiphissou Str., 145 64 Kifissia Tel.: +30 210-8763100, Fax: +30 210-8055850 Email: lenam@jetoil.gr www.jetoil.gr

09. LAW FIRMS

Motor Oil Gas S.A. 12A, Herodou Attikou Str., 151 24 Maroussi Tel.: +30 210-8094000, Fax: +30 210-8094444 Email: info@moh.gr www.moh.gr Revoil S.A. 5, Kapodistriou Str., 166 72 Vari Tel.: +30 210 8976000, Fax: +30 210 8972137 Email: info@revoil.gr www.revoil.gr

07. OIL & GAS Copelouzos Group 209, Kifissias Avenue, 151 24 Marousi Tel.: +30 210-6141106-115, Fax: +30 210-6140371 Email: info@copelouzos.gr www.copelouzos.gr Energean Oil & Gas 32, Kifissias Ave. Atrina Center, 151 25 Marousi Tel.: +30 210-8174200, Fax: +30 210-8174299 Email: info@energean.com www.energean.com EPA Attikis 11, Sof. Venizelou Ave. & Serron Str., 141 23 Lykovrisi Tel.: +30 210-3406000, Fax: +30 210-3406060 Email: info@aerioattikis.gr www.aerioattikis.gr Trans Adriatic Pipeline AG Greece, Branch Athens Tower, 21st Floor, 2-4, Messogion Avenue 115 27 Athens Tel.: +30 210-7454613, Fax: +30 210-7454300 Email: tapgreece@tap-ag.com www.trans-adriatic-pipeline.com/gr

08. ALTERNATIVE ENERGY

Coral S.A. 12A, Herodou Attikou Str., 151 24 Marousi Tel.: +30 210-9476000, Fax: +30 210-9476500 Email: info@coralenergy.gr www.coralenergy.gr

ABB 13th klm National Road Athinon-Lamias 144 52 Metamorfosi Tel.: +30 210-2891500, Fax: +30 210-2891599 Email: abb@gr.abb.com www.abb.gr

Coral Gas (Hellas) 26-28, G. Averof Str., 142 32 Perissos Tel.: +30 210-9491000, Fax: +30 210-9407987 Email: info@coralgas.gr www.coralgas.gr

EDF EN Hellas 120 ,Vas. Sofias Avenue, 115 26 Athens Tel.: +30 210-6462079, Fax: +30 210-6431420 Email: een@eenhellas.gr www.edf-energies-nouvelles.com

Kelemenis & Co. Law Firm 5, Tsakalof Str., Melathron Centre, 106 73 Athens Tel.: +30 210-3612800, Fax: +30 210-3612820 Email: enquiries@kelemenis.com www.kelemenis.com Metaxas Law 154, Asklipiou Str., 114 71 Athens Tel.: +30 210-3390748, Fax: +30 210-3390749 Email: info@metaxaslaw.gr www.metaxaslaw.gr Rokas International Law Firm 25 & 25A, Boukourestiou Str., 106 71 Athens Tel.: +30 210-3616816, Fax: +30 210-3615425 Email: athens@rokas.com, m.todorovic@rokas.com www.rokas.com

12. CHAMBERS American-Hellenic Chamber of Commerce 109-111, Messoghion Ave., 115 26 Athens Tel.: +30 210-6993559, Fax: +30 210-6985686 Email: info@amcham.gr www.amcham.gr Greek-German Chamber 10-12, Dorileou Str., 115 21 Athens Tel.: +30 210-6419000, Fax: +30 210-6445175 Email: ahkathen@mail.ahk-germany.de griechenland.ahk.de Athens Chamber of Commerce & Industry 6, Akadimias Str., 106 71 Athens Tel.: +30 210-3387104, Fax: +30 210-3622320 Email: info@acci.gr www.acci.gr

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13. INDUSTRY

02. NON GOVERNMENT

Mytilineos Group 5-7, Patroklou Str., 151 25 Maroussi Tel.: +30 210-6877300 Fax: +30 210-6877400 Email: info@mytilineos.gr www.mytilineos.gr

ACUE-Association of Energy Utilities Companies 2 Intrarea Amzei St, et. 1, ap. 2, District 1, Bucharest Tel.: +4 021 230 0050 Email: office@acue.ro www.acue.ro

Hellenic Halyvourgia 86A, Othonos & Kokkota Str., 145 61 Kifissia Tel.: +30 210-6283400 Fax: +30 210-8015614 Email: info@hlv.gr www.hlv.gr

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Allouminion Ellados 8, Artemidos Str., 151 25 Maroussi Tel.: +30 210-3693000 Fax: +30 210-3693108 Email: info@alhellas.gr www.alhellas.com Metka Group 8, Artemidos Str., 151 25 Maroussi Tel.: +30 210-2709200, Fax: +30 210-2759528 Email: info@metka.gr www.metka.com

ROMANIA 01. GOVERNMENT INSTITUTIONS ANRE-National Energy Regulator 3, Constantin Nacu Street, 020995, Sector 2, Bucharest Tel.: +4 021 327 8174 Email: anre@anre.ro www.anre.ro Competition Council Romania 1, Piata Presei Libere, building D1, 013701, Sector 1, Bucharest Tel.: +4 021 318 1198 Email: presedinte@consiliulconcurentei.ro www.consiliulconcurentei.ro National Agency for Mineral Resources 59, Dacia Blvd, 010407 District 1, Bucharest Tel.: +4 021 317 0018 Email: namr@namr.ro www.namr.ro Nuclear Agency & Radioactive Waste 21-25 Mendeleev Str., 010362, Sector 1, Bucharest Tel.: +4 021 316 8001 Email: contact@nuclearagency.ro www.agentianucleara.ro Romanian Government 1 Victoriei Square, 011791, Sector 1, Bucharest Tel.: +4 021 314 3400 Email: drp@gov.ro www.gov.ro Romanian Ministry of Economy 152 Victoriei Avenue, 010096, Sector 1, Bucharest Tel.: +4 021 202 5426 Email: dezbateri_publice@minind.ro www.minind.ro Romanian Ministry of Environment and Climate Changes 12 Libertatii Avenue, Sector 5, Bucharest Tel.: +4 021 408 9500 Email: srp@mmediu.ro www.mmediu.ro Romanian Ministry of Regional Development 17 Apolodor Street, North side, Sector 5, Bucharest Tel.: +4 037 211 1409 Email: info@mdrap.ro www.mdrap.ro

AFEER-The Association of Electricity Suppliers in Romania 7-9, Tudor Stefan Street, 1st floor, ap 2, 011655, Sector 1, Bucharest Tel.: +4 021 230 6031 Email: office@afeer.ro www.afeer.ro APER-Romanian Energy Policy Association 13, 13 Septembrie Road, 050711, Sector 5, Bucharest Tel.: +4 021 411 9829 Email: aper.ro@gmail.com www.aper.ro CNR-CME-Romanian National Comitee of World Energy Council 1-3, Lacul Tei Avenue, 020371, Sector 1, Bucharest Tel.: +4 037 282 1475 Email: ghbalan@cnr-cme.ro www.cnr-cme.ro CRE-Romanian Energy Center 6 Sofia St, 011838, District 1, Bucharest Tel.: +4 021 795 3020 Email: office@crenerg.org www.crenerg.org EURISC Romania 82-84 Mihai Eminescu Street, B entrance, ap. 19, Sector 2, Bucharest Tel.: +4 021 212 2102 Email: eurisc@eurisc.org www.eurisc.org Foreign Investors Council Romania 11 Ion Campineanu Street, 3rd floor, Sector 1, 010031, Bucharest Tel.: +4 021 222 1931 Email: office@fic.ro www.fic.ro Greenpeace CEE Romania 176 Calea Serban Voda, 040214, District 4, Bucharest Tel.: +4 031 435 5743 Email: info.romania@greenpeace.org www.greenpeace.org Petroleum Club of Romania 38, Dragos Voda Street, ap. 1, 020747, Sector 2, Bucharest Tel.: +4 031 102 0605 Email: petroleumclub@petroleumclub.ro www.petroleumclub.ro Romania Energy Center 319 Calarasilor Road, 030622, Sector 3, Bucharest Tel.: +4 031 432 8737 Email: energy@roec.ro www.roec.ro Romania Photovoltaic Industry Association 58-60, Gheorghe Polizu Street, Sector 1, Bucharest Email: office@rpia.ro www.rpia.ro Romanian Black Sea Titleholders Association 169A, Floreasca Road, building A, office 2099, District 1, Bucharest Tel.: +4 031 860 2357 Email: office@rbsta.ro www.rbsta.ro Romanian Electricity Suppliers Association 7-9, Tudor Stefan Street, ap. 2, 011655, Sector 1, Bucharest Tel.: +4 021 230 6031 Email: office@afeer.ro www.afeer.ro

Romanian Wind Energy Association 75-77 Buzesti St, 7th floor, office 34, District 1, Bucharest Tel.: +4 0736 621 222 Email: office@rwea.ro www.rwea.ro

03. ENERGY COMPANIES CEZ Romania 2B, Ion Ionescu de la Brad Street, 1st floor, 013813, Sector 1, Bucharest Tel: +4 021 269 2566 Email: office@cez.ro www.cez.ro E.ON Romania 42 Pandurilor Blvd, floor 6, office 6001, 540554, Targu Mures, Mures County Tel.: +4 0265 200 366 Email: office@eon-romania.ro www.eon-romania.ro Electrica Furnizare S.A. 1A, Stefan cel Mare Road, 011736, Sector 1, Bucharest Tel.: +4 037 244 2192 Email: office@electricafurnizare.ro www.electricafurnizare.ro Enel Romania 41-42 Ion Mihalache Bd., District 1, Bucharest Tel.: +4 037 243 6436 Email: contactee.ro@enel.com www.enel.ro ENGIE Romania 4-6 Marasesti Avenue, 040254, District 4, Bucharest Tel.: +4 021 9336 Email: office@engie.ro engie.ro Hidroelectrica S.A. 15-17 Ion Mihalache Avenue, 011171, Sector 1, Bucharest Tel.: +4 021 303 2500 Email: secretariat.general@hidroelectrica.ro www.hidroelectrica.ro Nuclearelectrica S.A. 65, Polona Street, 010505, Sector 1, Bucharest Tel.: +4 021 203 8200 Email: office@nuclearelectrica.ro www.nuclearelectrica.ro Termoelectrica S.A. 1-3, Lacul Tei Avenue, Sector 2, Bucharest Tel.: +4 021 303 7305 Email: office.economic@termoelectrica.ro www.termoelectrica.ro Transelectrica 2-4, Olteni Street, 030786, Sector 3, Bucharest Tel.: +4 021 303 5822 Email: office@transelectrica.ro www.transelectrica.ro Verbund Romania 8 Tudor Arghezi St, Et. 7, 020945, District 1, Bucharest Tel.: +4 021 301 6005 Email: ovidiu.pop@verbund.ro www.verbund.com Vestas Romania 11-15, Tipografilor Str., Building B3, 013714 Bucharest Tel.: +4 031 403 3099 Email: vestas-romania@vestas.com www.vestas.com

04. OIL & GAS Black Sea Oil & Gas 175 Calea Floreasca, 10th floor, District 1, 014459, Bucharest Tel.: +4 021 231 3256 Email: office@blackseaog.com www.blackseaog.com


Exxon Mobil Romania 169A, Floreasca Road, building A, 014472, Sector 1, Bucharest www.exxonmobileurope.com GSP-Petroleum Services Group Constanta Port, Berth 34, 900900, Constanta County Tel.: +4 024 155 5255 Email: office@gspoffshore.com www.gspoffshore.com Lukoil Romania 28-36, Nordului Road, District 1, Bucharest Tel.: +4 021 227 2106 Email: office@romania.lukoil.com www.lukoil.ro MOL Romania 4-6 Daniel Danielopolu Avenue, Sector 1, Bucharest Tel.: +4 021 204 8500 www.molromania.ro OMV Petrom 22, Coralilor Str., Petrom City, Sector 1, 013329 Bucharest Tel.: +4 021 402 2201 Email: office@petrom.com www.petrom.com

Schneider Electric Romania 4 Gara Herastrau St, District 2, 020334, Bucharest Tel.: +4 021 203 0606 Email: ro-csc@ro.schneider-electric.com www.schneider-electric.ro

GMP PR 19 Leonida St, District 2, Bucharest Tel.: +4 021 210 7777 Email: office@gmp.ro www.gmp.ro

Siemens Romania 24, Preciziei Street, West Gate Park, Building H3, 062204, Sector 6, Bucharest Tel.: +4 021 629 6400 Email: siemens.ro@siemens.com www.cee.siemens.com

Golin 89-97 Grigore Alexandrescu St, District 1, Bucharest Tel.: +4 021 301 0051 Email: office.bucharest@golin.com www.golin.com/ro

08. LAW FIRMS Biris Goran 47 Aviatorilor Blvd, 011853, Bucharest Tel.: +4 021 260 0710 Email: office@birisgoran.ro www.birisgoran.ro CMS Cameron McKenna 11-15 Tipografilor Str., B3-B4, Sector 1, Bucharest Tel.: +4 021 407 3800 Email: bucharest.office@cms-cmck.com www.cms.law

PETROTEL - LUKOIL S.A. 235, Mihai Bravu Street, Ploiesti, Prahova County Tel.: +4 0244 504 000 Email: office@petrotel.lukoil.com www.lukoil.ro

IK Rokas&Partners 45, Polona Street, Sector 1, Bucharest Tel.: +4 021 411 7405 Email: bucharest@rokas.com www.rokas.com

Rompetrol 3-5, Presei Libere Square, City Gate Building, Northern Tower, Sector 1, Bucharest Tel.: +4 021 303 0800 Email: office@rompetrol.com www.rompetrol.ro

Musat & Associates 43, Aviatorilor Avenue, 011853, Sector 1, Bucharest Tel.: +4 021 202 5900, Email: musat@musat.ro www.musat.ro

Transgaz 1 Constantin Motas Square, 551130, Medias, Sibiu County Tel.: +4 026 980 3333 Email: cabinet@transgaz.ro www.transgaz.ro Upetrom 1 Mai 1, 1 Decembrie 1918 Square, 100543, Ploiesti, Prahova County Tel.: +4 021 308 0200 Email: office@upetrom1mai.com www.upetrom1mai.com

07. EQUIPMENT AND MAINTENANCE Aggreko 7A Centura Road , Tunari, 077180, Ilfov Tel.: +4 075 222 5985 Email: catalin.tocu@aggreko.biz www.aggreko.ro General Electric Romania 169A Floreasca Street, 014472, District 1, Bucharest Tel.: +4 037 207 4541 Email: diana.jula@ge.com www.ge.com ICME ECAB SA 42, Drumul intre Tarlale Street, 032982, Bucharest Tel.: +4 021 209 0111 Email: Bucharest@icme.vionet.gr www.cablel.ro RIG Service SA 18, Marc Aureliu Street, nr. 18, 900744, Constanta Tel.: +4 0241 586 406 Email: office@rig-service.com www.rig-service.com Romenergo 175 Floreasca Road, District 1, Bucharest Tel.: +4 021 233 0771 Email: office@romenergo.ro www.romenergo.ro

NNDKP 201 Barbu Vacarescu St,18th Floor, 020276, District 2, Bucharest Tel.: +4 021 201 1200 Email: office@nndkp.ro www.nndkp.ro Serban&Musneci Associates 3 Pictor Ion Negulici St, 011941, Sector 1, Bucharest Tel.: +4 021 222 4478 Email: office@serbanmusneci.ro www.serbanmusneci.ro Wolf Theiss 58-60 Gheorghe Polizu Str., 011062, Sector 1, Bucharest Tel.: +4 021 308 8100 Email: bucuresti@wolftheiss.com www.wolftheiss.com

Grayling PR 9, Maltopol Street, 011047, Sector 1, Bucharest Tel.: +4 021 301 0051 Email: Cristi.Cretzan@grayling.com www.grayling.com OMD 6 Pictor G.D. Mirea St,District 1, Bucharest Tel.: +4 021 222 1091 Email: romania@omd.com www.omd.com Premium PR 23 Eroilor Sanitari Av., 050471, Sector 5, Bucharest Tel.: +4 021 411 0152 Email: office@premiumpr.ro www.premiumpr.ro The Group 3, Praga Street, 011801, Sector 1, Bucharest Tel.: +4 021 206 2200 Email: office@thegroup.ro www.thegroup.ro V+O Communication 40 Hristache Pitarul Str., 011626, Sector 1, Bucharest Tel.: +4 021 231 9195 Email: office@vando.ro www.vando.ro

11. EMBASSIES Canadian Embassy in Romania 1-3, Tuberozelor Street, 011411, Bucharest Tel.: +4 021 307 5000 Email: bucst@international.gc.ca www.canadainternational.gc.ca/romania-roumanie

09. EDUCATION INSTITUTES

Greek Embassy in Romania-Commercial Office 1-3, Pache Protopopescu Avenue, 021403, Sector 2, Bucharest Tel.: +4 021 210 0748 Email: ecocom-bucharest@mfa.gr www.mfa.gr/bucharest

Oil&Gas University Ploiesti 39, Bucuresti Ave., 100680, Ploiesti, Prahova County Tel.: +4 0244 573 171 Email: rectorat@upg-ploiesti.ro www.upg-ploiesti.ro

USA Embassy in Romania 4-6, Dr. Liviu Librescu Str., 015118, Sector 1, Bucharest Tel.: +4 021 200 3300 Email: infobuch@state.gov romania.usembassy.gov

Romanian Academy 125, Victoriei Road, 010071, Sector 1, Bucharest Tel.: +4 021 212 8651 Email: moancea@acad.ro www.acad.ro

12. BANKS

Valahia University 2 Carol I Blvd, 130024, Targoviste, Dambovita County Tel.: +4 0245 206 101 Email: rectorat@valahia.ro www.valahia.ro

10. PR COMPANIES Action Pr 35 Alexandru Constantinescu Str., Bucharest Tel.: +4 021 224 2270 Email: ruxandra.s@actionprgroup.com www.actionprgroup.com

Erste Group Banca Comerciala Romana 5 Regina Elisabeta Ave, 030016, Sector 3, Bucharest Tel.: +4 021 407 4200 Email: contact.center@bcr.ro www.bcr.ro ING Bank Romania 48, Iancu de Hunedoara Ave, 011745, Sector 1, Bucharest Tel.: +4 021 222 1600 Email: contact@ing.ro www.ing.ro International Finance Corporation (IFC) 31, Vasile Lascar Street, UTI building, 020491, Sector 2, Bucharest Tel.: +4 021 201 0311 Email: amihaescu@ifc.org www.ifc.org

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Piraeus Bank Romania 29-31 Nicolae Titulescu Road, District 1, Bucharest Tel.: +4 021 303 6969 Email: office@piraeusbank.ro www.piraeusbank.ro The European Bank for Reconstruction and Development (EBRD) 56-60, Iancu de Hunedoara Avenue, Metropolis Center, West Wing, Sector 1, Bucharest Tel.: +4 021 202 7100 www.ebrd.com The European Investment Bank (EIB) 31, Vasile Lascar Str., 020492, Sector 2, Bucharest Tel.: +4 021 208 6400 Email: Bucharest@eib.org www.eib.org

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Transenergo Com 90 Calea 13 Septembrie, 050726, District 5, Bucharest Tel.: +4 021 403 4945 Email: office@transenergo.ro transenergo.ro

19. CONSULTANTS ISPE-Institute for Studies and Power Engineering 1-3, Lacul Tei Avenue, 20371, Sector 2, Bucharest Tel.: +4 037 282 1076 Email: office@ispe.ro www.ispe.ro

SERBIA

14. AUDIT

01. GOVERNMENT INSTITUTIONS

Deloitte Romania 4-8, Nicolae Titulescu Road, Est entrance, 011141, District 1, Bucharest Tel.: +4 021 222 1661 Email: romania@deloittece.com www.deloitte.com

Agency for Environmental Protection 27a Ruze Jovanovica, Belgrade Tel: +381 11 2861 065 Fax: +381 11 2861 077 Email: office@sepa.gov.rs www.sepa.gov.rs

Ernst & Young 15-17 Ion Mihalache Blvd, 011171, District 1, Bucharest Tel.: +4 021 402 4000 Email: office@ro.ey.com www.ey.com/ro

Commission for Protection of Competition 7 Kneginje Zorke Street, Belgrade Tel: +381 11 381 1911 Fax: +381 11 381 1936 Email: office.kzk@kzk.gov.rs www.kzk.org.rs

KPMG 69-71, Bucharest-Ploiesti Road, Victoria Business Park DN1, 013685, Sector 1, Bucharest Tel.: +4 0372 377 800 Email: kpmgro@kpmg.ro www.kpmg.com

16. CHAMBERS OF COMMERCE Bucharest Chamber of Commerce and Industry CCIB 2 Octavian Goga Avenue, 030982, Sector 3, Bucharest Tel.: +4 021 318 2573 Email: ccir@ccir.ro www.ccir.ro Constanta Chamber of Commerce 185A, Alex. Lapusneanu Ave, 900457, Constanta Tel.: +4 024 161 9854 Email: office@ccina.ro www.ccina.ro

17. IMF International Monetary Fund 7, Halelor Street, 030118, Sector 3, Bucharest Tel.: +4 021 311 5833 Email: ahajdenberg@imf.org www.imf.org

18. ENERGY TRADERS Arelco Power 11 Pitarul Hristache St, District 1, Bucharest Tel.: +4 021 231 7056 Email: office@arelco.ro www.arelco.ro Repower 19-21 Primaverii Blvd, 011972, District 1, Bucharest Email: info@repower.com Tel.: +4 021 335 0935 www.repower.com/ro Tinmar 246C Calea Floreasca, District 1, Bucharest Tel.: +4 031 9797 Email: office@tinmar-energy.ro ww.tinmar.ro

Energy Agency of the Republic of Serbia 5 / V Terazije Street, Belgrade Tel: +381 11 3033 829, Fax: +381 11 3225 780 Email: aers@aers.rs www.aers.rs Ministry of Mining and Energy 22-26 Nemanjina Street, Belgrade Tel: +381 11 3604-403 Fax: +381 11 3616-603 Email: kabinet@mre.gov.rs www.merz.gov.rs

03. ENERGY COMPANIES Centar 7, Slobode Street, Kragujevac Tel: + 381 34 37 00 83, Fax: + 381 34 37 01 56 Email: direktor@edcentar.com www.edcentar.com Drinsko-Limske Hidroelektrane 1, Trg Dusana Jerkovica Street, Bajina Basta Tel: + 381 31 8636 59, Fax: + 381 31 8643 54 Email: mijodrag.citakovic@dlhe.rs www.dlhe.rs Elektromreza Srbije 11, Kneza Milosa Street, Belgrade Tel: +381 11 3330 700, Fax: + 381 11 32 39 908 Email: kabinet@ems.rs www.ems.rs Elektrovojvodina 100, Oslobodenja Boulevard, Novi Sad Tel: + 381 21 527 030, Fax: + 381 21 422 847 Email: bogdan.laban@ev.rs www.elektrovojvodina.rs Elektrodistribucija Beograd 1-3, Masarikova Street, Belgrade Tel: + 381 11 3616 706, Fax: + 381 11 3616 641 Email: zoran.rajovic@edb.rs www.edb.rs Elektrosrbija 5, Dimitrija Tucovica Street, Kraljevo Tel: + 381 36 3 21 686, Fax: + 381 36 3 21 958 Email: Srdjan.Djurovic@Elektrosrbija.rs www.elektrosrbija.rs

EPS Obnovljivi Izvori 2, Carice Milice Street, Belgrade Tel: + 381 11 2024 828, Fax: + 381 11 2629 489 Email: aleksandar.vlajcic@eps.rs www.eps.rs EPS Snabdevanje 2, Carice Milice Street, Belgrade Tel: +381 11 6556 747 Fax: + 381 11 655 6757 Email: kabinet@eps-snabdevanje.rs www.eps-snabdevanje.rs Hidroelektrane Derdap 1, Trg kralja Petra Street, Kladovo Tel: + 381 19 801 651, Fax: + 381 19 801 659 Email: goran.knezevic@djerdap.rs www.djerdap.rs HIP Petrohemija 82, Spoljnostarcevacka Street, Pancevo Tel: +381 13 307 000, Fax: +381 13 310 207 Email: info@hip-petrohemija.rs www.hip-petrohemija.rs JP Srbijagas 12, Narodnog fronta Street, Novi Sad Tel: +381 21 481 2703, Fax: +381 21 481 1305 Email: kabinet@srbijagas.com www.srbijagas.com

04. ALTERNATIVE ENERGY Continental Wind Serbia 23, Resavska Street, Belgrade Tel: +381 11 785 0020 Email: serbia@continentalwind.com www.continentalwind.com Electrawinds-S 6, Vladimira Popovica Street, Belgrade Tel: +381 11 660 0955 www.electrawinds.be Energo Green 115E, Mihajla Pupino Boulevard, Belgrade Tel: +381 11 353 9522 Email: ivan.stanisavljevic@energogreen.com www.energogreen.com Vestas Central Europe 6, Mihaila Pupina Boulevard, Belgrade Tel: +49 4841 971 722 www.vestas.com

05. LAW FIRMS Karanovic & Nikolic 23, Resavska Street, Belgrade Tel: +381 11 3094 200, Fax: +381 11 3094 223 Email: KNSerbia@karanovic-nikolic.com www.karanovic-nikolic.com Petrikic & Partneri in cooperation with CMS Reich-Rohrwig Hainz 3, Cincar Janka Street, Belgrade Tel.: +381 11 3208900, Fax: +381 11 3208930 Email: belgrade@cms-rrh.com www.cms-rrh.com/Belgrade-Serbia



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