OSLO – An Oslo court ruled on Friday in favor of Norway in a lawsuit involving a group of international investors who argued that Norway’s decision to cut natural gas pipeline tariffs would cost them 15 billion crowns ($1.8 billion) in lost earnings by 2028.
Challenging Norway’s reputation as a predictable place to do business, four firms owned by funds including Allianz, UBS, the Abu Dhabi Investment Authority and the Canada Pension Plan Investment Board, argued that Norway illegally cut fees on the 8,000-km (5,000-mile) Gassled gas pipeline network.
The four firms, which hold a combined 45 percent stake in Gassled, said they would consider whether to appeal the decision.
“All four plaintiffs will now evaluate this in detail and assess the next step within the next six weeks, which is the deadline,” Kurt Georgsen, CEO of Gassled partner Silex Gas, told Reuters.
The stakes were bought in 2010 and 2011 from ExxonMobil , Total, Statoil and Royal Dutch Shell .
The Oil and Energy Ministry had not provided full information to the buyers and sellers regarding how the tariffs could be changed, the court said, but added that the ministry’s officials themselves at the time had been unaware of how easily this could be done.
“The ministry is to blame for this, but following an overall assessment the court concludes that the actions of the ministry’s leadership can’t be regarded as qualifying negligence – which according to the law is a condition for triggering liability,” said the ruling.
The losing party in a lawsuit in Norway will most often be told to pay the winner’s legal fees, but in the case of the Gassled lawsuit, the government was partly to blame for the fact that it had gone to trial, the court said.
“Therefore, the parties shall pay their own legal costs,” it added.
The oil and energy ministry said in a statement that it was “satisfied” with the verdict.
The firms, many of which bought into Gassled in 2011 through a 17 billion crown deal for state-controlled Statoil’s 24 percent stake, argued the tariff cut benefits gas producers, the very firms that sold them their stakes.
The state refuted the claim, arguing that returns were above agreed levels and fees were so high that they discouraged new offshore investment.
It said most profit from oil and gas should be derived from the fields, not from the infrastructure, and that pipeline tariffs needed to be cut from October 2016 because the predicted returns had been achieved.
One of the investors, Njord Gas Infrastructure, owned by UBS and France’s Caisse des Depots, had its bond rating lowered in 2013 to junk status from investment grade as a result of the change in tariff. It is currently rated BB by Standard & Poor’s.
Solveig Gas Norway, owned by the Abu Dhabi Investment Authority, Allianz and the Canada Pension Plan Investment Board, also saw a multi-level downgrade of its bonds in 2013, and currently has a Baa2 rating by Moody’s.
(Additional reporting by Terje Solsvik, editing by David Evans)
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