State aid: Commission approves €100 million support in favour of Greek oil and gas company Energean affected by coronavirus outbreak

The European Commission has approved two Greek measures, expected to mobilise a total of €100 million, to support Energean Oil and Gas S.A. in the context of the coronavirus outbreak. The measures were approved under the State aid Temporary Framework. Energean is operating the only oil extraction site in Greece under a concession contract. It generates most of its revenues from the sale of crude oil and has suffered severe losses due to the collapse of oil prices in the wake of the coronavirus outbreak. Energean is currently facing difficulties in accessing financing on the market. Therefore, the aid measures aim at addressing these liquidity needs. The support will take the form of (i) a public guarantee on a commercial loan of around €90.5 million to be contracted by Energean and (ii) a subordinated loan amounting to €9.5 million by the Greek State. The Commission found that the measures are in line with the conditions set out in the Temporary Framework. In particular, the support (i) will be granted no later than 31 December 2021; (ii) will be used to cover Energean’s investment and working capital needs during the next twelve months; and (iii) will have a duration of maximum eight years (in line with the Temporary Framework provision that allows to modulate the standard duration of six years if there is appropriate compensation). The Commission concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measures under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.58824 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.