ConocoPhillips, Dong agree to sell Gassled pipeline stakes in Norway

By MIKAEL HOLTER
Bloomberg

ConocoPhillips and Dong Energy agreed to sell their stakes in Gassled, Norway’s offshore gas-pipeline network, to CapeOmega, an oil company backed by Norwegian private-equity firm HitecVision, a person familiar with the matter said.

Conoco owns a 1.68% stake in Gassled and Dong holds 0.98%, according to network operator Gassco’s website. The two companies agreed to sell this summer and both deals still need approval from authorities before they can be closed, said the person, who asked not to be identified because the information is private. The person didn’t know the price of the transactions.

CapeOmega CEO Einar Gjelsvik declined to comment on the matter. “We’re a new company, so we have a lot of available capital and see a rather attractive market, but what we’re looking at and discussing, I can’t get into,” he said.

Conoco’s Norway-based spokesman Stig Kvendseth and Dong spokesman Christian Buch Hansen both declined to comment.

Four other owners representing 44% of the shares in Gassled sued the Norwegian government over a cut in gas-transportation tariffs that they said would reduce their income by 15 billion kroner ($1.9 billion). Conoco and Dong, who were not part of the lawsuit, signed their deals with CapeOmega before an Oslo court ruled in favor of the Norwegian government in September, the person said.

Pipeline Lawsuit

The plaintiffs, which are backed by investors including Allianz and Abu Dhabi’s sovereign wealth fund, decided to sue at the beginning of 2014, after two successive governments pushed through tariff cuts of as much as 90% in order to make gas discoveries offshore more profitable and stimulate exploration. The plaintiffs spent 32 billion kroner buying their stakes in 2011 and 2012 from oil companies such as Statoil and Total before the cuts were announced. They haven’t yet said whether they will appeal the Oslo court’s ruling.

CapeOmega changed the stated objective of its business on May 13 to include “production and transportation of oil and gas,” according to the website of the Broennoeysund Register Centre, Norway’s business register. The company’s objective had earlier been stated as production on mature fields and the removal of offshore installations.

Conoco and Dong’s deals come at a time when oil companies are reducing spending and selling assets to counter a collapse in crude prices. Total, Europe’s second-biggest oil company by market capitalization, agreed in August to sell gas pipelines and a terminal in the UK North Sea for 585 million pounds ($906 million).

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