IP/01/830
Brussels, 13 June 2001
Commission objects to GFU joint gas sales in Norway
The European Commission has warned Norwegian gas producers that the joint sale of Norwegian gas carried out through the Gas Negotiation Committee (GFU) is in breach of the European Union competition rules as it fixes, among other things, the price and the quantities sold. The Commission welcomes the recent announcement by the Norwegian government to discontinue the GFU joint sales. But the Commission wants this to be translated into facts by the companies and, more importantly, to see the long term, adverse effects of the past and present misbehaviour remedied.
The Commission has sent a statement of objections to Norwegian companies Statoil and Norsk Hydro, the current members of the GFU, warning them that the joint sales of Norwegian gas through the GFU infringe Article 81(1) of the EC Treaty and Article 53(1) of the European Economic Area (EEA) Agreement.
The GFU case concerns joint sales of natural gas through a single seller, the GFU, from Norway to the EU, since at least 1989. The GFU is today comprised of Statoil and Norsk Hydro. Saga Petroleum was a member of the GFU until it was recently merged with Norsk Hydro Produksjon. The GFU negotiates natural gas sales contracts with buyers on behalf of all the other natural gas producers in Norway and thus fixes the selling price, volumes and all other trading conditions.
The Commission's formal warning follows investigations started in 1996. In the Commission's view, the companies concerned must put an end to the joint selling of gas from Norway and eliminate the restrictive effects residing in the contracts concluded with third parties under the joint selling scheme.
GFU has entered into a large number of long term supply agreements with European gas operators which perpetuate the adverse effects of the joint selling scheme for several years and which have led to a significant rigidity and lack of liquidity in the European gas markets.
As the European gas market is progressively being liberalised, it is of paramount importance that producers sell their gas individually so that those customers that can already choose their supplier benefit from real choice and competitive prices (see also recent recent Corrib statement IP/01/578).
A statement of objections is a legal step in proceedings under Article 81 of the EC Treaty and Article 53 of the EEA Agreement, which ban cartels and other damaging concerted business practices. It does not prejudge the outcome of the investigation as the companies will have the right to answer the Commission's objections, to have access to the file and to request a formal hearing.
Norway's announcement
The Norwegian government recently took measures aimed at the discontinuation of the sale of Norwegian natural gas through the GFU to the EEA from the 1st of June of this year. The European Commission welcomes this as a step in the right direction. The Commission notes, however, that the abolition of the GFU is not yet final. Moreover, as the Commission's proceedings concern the behaviour of Norwegian gas producers, its proceedings will continue until measures taken by the Norwegian Government have been implemented by the companies in question and all objections of the Commission remedied.
The Commission does not exclude to issue a statement of objections also to other Norwegian gas producers in the context of the GFU case in the near future.