Norway to stop sales through the Gas Negotiating Committee

The Norwegian government Monday said it would discontinue marketing of offshore North Sea gas through the Gas Negotiating Committee (GFU) effective June 1 and will ask the Storting to proposed to abolish it effective Jan. 1. GFU, was established to negotiated gas sales contracts on behalf of all operators.


HOUSTON, May 30 -- The Norwegian government Monday said it would discontinue marketing of offshore gas through the Gas Negotiating Committee (GFU) and proposed to abolish it.

The Ministry of Petroleum and Energy said the marketing of Norwegian North Sea gas through the GFU will be discontinued June 1 and the GFU will be abolished Jan. 1, if the Storting approves.

GFU, dominated by Norwegian majors, negotiated gas sales contracts on behalf of offshore operators.

The ministry said, "As part of the ongoing restructuring of the Norwegian gas activities, for some time (the government) has considered a change in the Norwegian resource management system, including the abolishment of the GFU.

"Important considerations are the increased maturity of the Norwegian Continental Shelf, the opening of the gas markets in Europe, and changes in company structures along the gas value chain. In these circumstances the producers on the Norwegian Continental Shelf should have increased freedom to act commercially."

The ministry said ending the GFU would require legal changes that will take some time, and temporary arrangements will be necessary pending the formal abolishment of GFU.

It said the government will instruct offshore producers to initiate the adaptation of contracts and other agreements between themselves, in order for the companies to be able to market their gas on an individual basis from now on.

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