Naturgy and Eni finalize an agreement with Egypt to resolve the conflict over the Damietta regasification plant. The companies have already proposed a solution to the European Commission and it is expected that today it will be the country’s council of ministers that can make a decision on the proposal on the table and resolve this dispute definitively.
Naturgy and Eni broke the agreement they had with the country in the middle of the year because of the coronavirus but for a few months they have resumed contacts with the Egyptian Government to try to reach a solution, as indicated by the Economist.
At the same time, this same week progress is being made in the US justice with the measures taken by Naturgy and Eni to try to collect the arbitration award that recognizes a right to collection of more than 2,200 million euros and there have been several views in the court.
The agreement that is being proposed and, for which the procedures with Brussels have already begun, would involve the purchase by the Italian oil company of the Damietta regasification plant and in return Naturgy would receive financial compensation.
The agreement would be similar to the one signed last February. The companies reached an agreement for which Naturgy received around 750 million. The Spanish company and ENI valued the company at 1,363 million euros, of which 1,200 million corresponded to assets in Egypt and the other 300 million to the rest of the world.
After the agreement, Naturgy was to receive a cash payment of 545 million euros, as well as the majority of assets outside Egypt, excluding the commercial activities of natural gas in Spain, which would remain in the hands of ENI, which in the The practice involved taking a 7.36% stake in the Qalhat liquefaction plant in Oman and the freight contracts for the LNG tankers Galicia Spirit and Cádiz Knutsen.
On the contrary, Eni kept the commercial business in Spain to avoid that the operation could have problems in Competition.
Unión Fenosa Gas presented the arbitration procedure on February 27, 2014 through its law firm King & Spalding (which also worked with Gas Natural in the dispute it had with Algeria) and the case has run its course.
The company has filed a total of five lawsuits: the first in Cairo (Egypt), the second at the International Center for Settlement of Investment Disputes (ICSID) and the third in Madrid, which remains unresolved.
In December of last year, UFG won the first lawsuit against Egas, which will have to pay him 6 million for interrupting the gas supply, and the second won with the imposition of 1,700 million euros.
With the closing of this operation, if it is finally achieved today, the company will advance in the asset rotation plan that it plans to present next February and in which it has already disposed of the business in Chile as well as the participation in four technological subsidiaries, as this newspaper advances today.
Naturgy contemplated in its strategic plan to reduce operating expenses by an amount of 500 million euros until 2022, in order to go from the current 2,500 million euros to 2,000 million in four years.
The operation also means that around 600 people who worked at Naturgy now become part of the corresponding workforce of IBM and Everis, although they will maintain working conditions equivalent to those they previously had, as agreed by the company.
With this movement, Naturgy strengthens itself in the current context and impact of the evolution of the energy sector (decarbonisation, energy transition, greater competition …) in Europe and Spain, and achieves a greater contribution of value and innovation to operational functions. of the group.
The company plans to present its strategic plan this February in which the president himself assures that “there will be no sacred cows” and that he will seek the growth of society and maintain shareholder compensation.
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