Bulgarian Energy Holding Chief: We discussed option to reduce the € 77 m fine

We have consultants with whom we have discussed the possibility of reducing part of the fine and returning it to the three companies, the head of the BBulgarian Energy Holding, Petyo Ivanov told BNT on 20^th of December. We even have the opportunity to turn the decision to the European Court and we will probably refer to it and ask it to consider the case in substance, he added.

The European Commission said on 17^th of December that it had fined Bulgarian Energy Holding (BEH), its two of its subsidiaries – gas company Bulgargaz and gas grid operator Bulgartransgaz, to the amount of 77.1 million euro for blocking competitors’ access to key gas infrastructure in Bulgaria, in breach of EU antitrust rules.

The fine is required to be paid within 90 days of the decision. The three companies have a 3-month period in which we have to make the payment, with the possibility of a прожисионал payment or bank guarantee, Ivanov said.

He assured that this fine did not be paid from people's pockets.

There is a violation identified by the Commission, which the Bulgarian side does not accept, noted the head of BEH. It is about an alleged violation for restricting the access to the gas transmission network - by Bulgartransgaz to the access to the gas storage in Chiren, as well as a restriction to the transit gas pipeline in Romania, he added.

Petyo Ivanov, CEO of BEH: The Bulgarian side can not be blamed for not giving access to a resource, to an asset that is in a foreign country. With regard to the first two accusations, our statement is that this access has always been provided in accordance with the rules that were applicable at the time. Our rules may not have been fully in line with the European standards, but we have always worked according to the rules available.

Ivanov noted that consumers were not harmed.

I have not said it is entirely for their benefit, but what is in their favour is that our sector is fully regulated both in terms of transmission operator tariffs and gas prices, he added.

We are talking about a violation from 2010 to 2015, during the period in question, the prices at which Bulgargas sold natural gas were at certain periods lower than the cost of purchasing the resource, Ivanov commented.

It is nowhere noted in the decision that Bulgarian consumers have suffered damages in connection with the violation identified by the EC, he added.

Despite the EC decision, we believe that our joint projects, including the Balkan gas hub, will be completed and successfully implemented. Thus, they will help to increase competition on the gas and energy markets in Bulgaria, the head of BEH noted.

In any case, the company for this year will not make a profit and will not be able to pay dividends no matter whether it would be fined this year or next year, Ivanov said.

There is always the option of taking out Bulgartransgaz and Bulgargaz from the energy holding, but in the framework of the dialogue we had in the commission after the so-called indictment was issued in 2015, until yesterday we exchanged various options with the commission. In those options, we proposed taking out of Bulgargaz and taking out part of Bulgartransgaz from BEH. For one reason or another, these proposals were not accepted by the EC, Ivanov said.

Petyo Ivanov, CEO of BEH: Whether we take out Bulgartransgaz or Bulgargaz should be equal to the commission. According to Art. 345 of the Treaty on the Functioning of the EU, no distinction is made between private and public ownership. We proposed to transfer Bulgargaz to various state agencies.

With regard to Bulgartransgaz, we are clearly aware that it is of utmost importance to our national security. We have never been in a position to offer more than 50% participation of another investor in this company, the CEO of BEH said.

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