January 30, 2023

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Norway opposes capping the price of natural gas: “It will not solve the problem”

After becoming Europe’s first supplier of natural gas, instead of Russia, Norway shattered the hopes expressed by most European countries, which would like a price cap for natural gas imports.

According to Agerpres, which quotes AFP, at the end of a telephone conversation with the president of the European Commission, Ursula von der Leyen, the Norwegian prime minister, Jonas Gahr Stoere, declared himself “skeptical” of this idea.

“We agree to have a closer dialogue with the EU in the future on the various proposals that are on the table. We go to the talks with an open mind but we are skeptical about the idea of ​​a maximum price for natural gas. A maximum price will not solve the fundamental problem, which is that there is too little natural gas in Europe”Jonas Gahr Stoere said in a press release.

In the context of the emergency measures evoked on Friday by the European Ministers of Energy, to counteract the explosion of gas and electricity bills, some have evoked the possibility of price caps for natural gas imports into the EU.

While the European Commission proposed capping the price of natural gas which I come from Russiaseveral member states, such as Italy, have highlighted the fact that currently Russian gas represents only approximately 9% of European imports and consequently they are going to propose a complete ceiling on the price of gas purchased by the EU.

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Norway has become the EU’s largest gas supplier

Norway, a non-EU country, has become the bloc’s biggest gas supplier after Russia cut supplies following the war in Ukraine, giving the Scandinavian country record revenues from its oil industry as that prices have increased a lot.

According to calculations made by Nordea Markets bank analysts, Norway’s oil and gas revenues could reach 1,500 billion kroner (150 billion euros) in 2022 and 1,900 billion kroner next year, shattering the record set last year (830 billion crowns).

“The most important contribution that Norway can make in the current situation is to maintain high oil and gas production in the future“, insisted the Norwegian Minister of Petroleum and Energy, Terje Aasland. He estimated in May that in 2022 Norway’s gas exports could reach a record level of 122 billion cubic meters.

But critics also appeared within Norway’s borders, some being worried about the risk that Norway would not be categorized as a “war profiteer”.

Norwegian embassies in several European countries are currently worried about the consequences this situation could have on the Scandinavian country’s image, claims an article published on Monday in the Norwegian daily Dagens Naeringsliv.

The authorities in Oslo insist that the terms of the commercial agreements should be established in the course of negotiations between the companies that deliver hydrocarbons and those that buy them, recalling the fact that in the past it was European customers who insisted on contracts based on variable prices rather than long-term contracts that give more visibility.

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