Allianz, Abu Dhabi fund start $4b gas lawsuit
Owners of Norway pipeline network aim to recoup lost income from tariff cuts in 2013
Owners in Norway’s gas pipeline network yesterday kicked off their effort in an Oslo court to recoup what they claim will be about 34 billion crowns ($4.4 billion; Dh16 billion) in lost income from tariff cuts pushed through in 2013.
Investors in Gassled, whose owners include Allianz SE, Canadian pension funds, Abu Dhabi’s wealth fund and a fund run by UBS AG have sued Norway to reverse the unexpected 90 per cent reduction set to take effect in late 2016. The trial is scheduled to run through June 16 at the Oslo District Court.
Compensation request
The investors, who in 2011 and 2012 paid about 32 billion crowns for a 44 per cent stake in the pipelines of western Europe’s biggest gas producer, argue the cuts violate Norway’s petroleum law, European conventions on private property and the nation’s constitution, according to a pretrial document filed to the court. They also ask for compensation in the event the court should find the changes legal.
“Low earnings and risk were not what these companies invested
Two successive governments have justified the adjustments as necessary to boost exploration and to make more new discoveries profitable. The industry is now also grappling with plunging oil prices and companies have cut thousands of jobs in Norway since last year.
Allianz last year in a letter to Prime Minister Erna Solberg pleaded for a meeting, saying the cuts led to “significant” losses and write downs on its 6.1 billion-crown investment. The insurer said that the reductions damaged trust in Norway, potentially harmed investment in infrastructure in general and hurt German and Norwegian citizens.