Bulgaria’s utilities regulator to probe private provider Overgas

Written by on January 6, 2016 in Bulgaria - Comments Off on Bulgaria’s utilities regulator to probe private provider Overgas

Bulgaria’s Energy and Water Regulatory Commission said on January 6 that it would check the “execution of licence duties and the financial situation” of Overgas, the private gas provider that has become embroiled in a public row over the past week after being cut off from Russian gas deliveries.

At the same time, the regulator praised the efforts made by Overgas and state-owned Bulgarian Energy Holding, through its gas trading arm Bulgargaz and grid operator Bulgartransgaz, to “resolve the problem”.

Last week, Overgas was notified by Gazprom Export, a subsidiary of Russia’s state-owned gas company Gazprom, that direct deliveries would be discontinued, instead the gas would be re-routed through Bulgargaz, according to a statement posted on the Overgas website.

This prompted a late-evening meeting between Prime Minister Boiko Borissov and executives from several state-owned companies in the energy sector on December 30 to discuss the issue and ensure that Overgas’ customers – 55 000 households and 3000 industrial clients – would not be left without gas.

Later, in an appearance on the breakfast show of private broadcaster bTV on January 4, Borissov said the whole episode could have been an attempt to bring down the electricity grid by forcing gas users to switch to electricity. This, in turn would have prompted protests against the government, not unlike the January 2013 protests against high electricity bills, which brought down Borissov’s previous cabinet.

However, Borissov said that Gazprom was not to blame and it was Overgas that should have contacted Bulgargaz earlier to secure gas in case of a halt of deliveries from Gazprom Export.

Overgas – an equally-weighted joint venture between Overgas Inc. (owned by Bulgarian businessman Sasho Donchev) and Gazprom (Gazprom itself holds only a small stake, the bulk is owned by Gazprom Export) – says that it has no debts to Gazprom Export, which is currently in the process of exiting the joint venture, only “current liabilities”.

According to an EurActiv report on January 6, Donchev has already asked the European Commission to investigate the matter, alleging that Gazprom was abusing its dominant position on the Bulgarian market. Gazprom is currently the target of an EU anti-trust investigation, which concluded that Gazprom did abuse its dominant position in several Eastern European countries, Bulgaria included, but the Russian company is still in talks to reach a settlement and avoid a fine.

In local media, some observers interpreted the affair as an attempt to squeeze out Overgas, which is the largest privately-held competitor to Bulgargaz, from the gas market. This would also serve to indirectly put pressure on the daily newspaper owned by Donchev, Sega, which is critical of the government and Borissov personally (the prime minister is often depicted in the newspaper’s cartoons in a rather unflattering light), according to this interpretation of events.

(Photo: Jayesh Nair)

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