Norway set for ‘unprecedented’ challenge over gas ruling

Date: 20/09/01

By Laurence Frost

THE EU is facing an unprecedented legal challenge against its probe into alleged gas price fixing in Norway, which Brussels claims breaks the European Economic Area (EEA) Agreement.

Norway is considering whether to launch infringement proceedings within the EEA after Brussels began controversial legal moves against companies exporting gas from the Norwegian Continental Shelf.

The European Commission alleges that 23 companies conspired to fix prices on gas sold to the EU through Norway's gas sales board (GFU). They include Norwegian state-controlled operators Statoil and Norsk Hydro, as well as Shell, BP Amoco, TotalFinaElf, Chevron and Exxon Mobil.

But Norway says the challenge to the GFU's price-setting role constitutes an attack on Norway's resource infrastructure and laws. "These companies acted according to a system established by the Norwegian government," said Gunnar Jerde of Norway's ministry of petroleum and energy. "This is a challenge to our system."

The ministry is coordinating a joint defence for companies that have received the Commission's statement of objections, and has asked EU competition chief Mario Monti to include Oslo as an interested third party to proceedings. Meanwhile, Norway is preparing to hit back at a meeting of the EEA's supervisory joint committee next Friday (28 September). "We could either discuss it informally or launch infringement proceedings against the EU," said a senior government official. "This is now under consideration - a decision will be taken in time for this month's meeting."

With Oslo maintaining that national resource management lies outside the scope of the EEA, the committee could be forced to refer the legal dispute to the European Court of Justice or another court for arbitration. The Commission rejects the defence claim - backed by Norway - that the exporting companies were compelled to sell through the GFU. "We believe the companies were acting of their own free will," said Monti's spokeswoman Amelia Torres. "We've concluded that the companies violated article 81 [of the EU Treaty] and article 53 of the EEA Agreement by engaging in anti-competitive practices."

Norway has already suspended the GFU's involvement in EU gas export contracts and announced full abolition from January 2002. But the Commission wants to accelerate liberalisation by forcing the companies to renegotiate contracts drawn up under the old regime."Contracts in the industry are typically concluded for a very long time," said Torres. "We need to see the long-term adverse effects of past anti-competitive behaviour addressed."

Oslo officials say Norway's position is unlikely to be affected by a possible change of government following last week's general election blow to the ruling Labour party. "This is not a contentious issue politically," said one. "This concerns vital Norwegian interests - it's business as usual."

An infringement case would be the first ever in the history of the 1992 EEA Agreement, which extends Union competition and single market rules to non-EU members Norway, Switzerland and Liechtenstein, who prefer to remain outside the bloc while enjoying free trade with its members. Statoil and Norsk Hydro have been given until the end of October to respond to the Commission's statement of objections, after their lawyers asked for more time.

The EU is facing an unprecedented legal challenge against its probe into alleged gas price fixing in Norway, which Brussels claims breaks the European Economic Area (EEA) Agreement.