MOSCOW, August 26 – PRIME. Attempts by European consumers to influence the prices of Norwegian gas contradict all the principles of economic liberalism that Europe has long adhered to, Ilya Kalenkov, general director of PJSC Evropeiskaya Elektrotekhnika, commented to RIA Novosti.
World media wrote that European companies engaged in gas purchases are beginning to discuss that Norway should lower prices. One option was to enter into long-term contracts at prices well below today’s spot prices, such as the equivalent of $150-$200 per barrel of oil, although that would still be well above the historical average.
However, Norwegian Minister of Petroleum and Energy Terje Åslunda said yesterday that he does not plan to pursue a policy in which oil and gas companies on the continental shelf will be required to enter into contracts for the supply of gas at a fixed price. The minister added that instead, Norway should focus on supplying as much gas as possible to meet growing demand and remain a reliable supplier.
“This decision is quite logical. Why should Norway sell gas under market conditions, firstly, cheaply, and secondly, at fixed prices? This is contrary to all the principles of economic liberalism that have long been introduced in Europe. Norway, in the current market extract maximum profit,” Kalenkov estimated.
The expert recalled that Europe itself has long opposed such long-term contracts. “Poland, for example, sued Gazprom, and the European Arbitration Court ruled on multibillion-dollar payments in favor of the plaintiff due to the fact that he allegedly overpaid under these longest-term contracts for gas supplies,” he explained.
Kalenkov added that a “golden time” has come for Norway, when due to record gas prices it can receive “surplus profits”, which are unlikely to fall in the foreseeable future. However, such a decision could result in higher energy prices for both domestic and industrial European gas consumers, which could render entire industries uncompetitive. “And consequently, the entire continent will become poorer and more impoverished,” the expert concluded.