Allianz Pleads With Norway’s Premier After Gassled Writedown
Europe’s biggest insurer said in a letter to Prime Minister Erna Solberg that the tariff reductions have damaged trust in Norway, potentially harmed investment in infrastructure in general and hurt German and Norwegian citizens.
“As the leader of a new government, you have the opportunity to take a fresh look at the adjustment of tariffs and possibly reverse an incomprehensible discrimination of committed long-term investors,” Allianz Chief Executive Officer Michael Diekmann and executive board member Maximilian Zimmerer said in the letter dated Feb. 7. The correspondence was obtained by Bloomberg through a freedom of information request.
The German insurer, with partners including a company backed by Abu Dhabi’s wealth fund, sued Norway in January over a decision last year to cut tariffs for transportation of new gas volumes through Gassled by as much as 90 percent. Norway, western Europe’s biggest gas producer, has said the reductions were necessary to encourage more production and development.
The Conservative-led government, which took power in October, in December maintained the former administration’s decision. They will come into force in October 2016 and are designed to make more gas discoveries profitable and boost exploration offshore Norway, the governments said.
While Allianz did not specify the size of the Gassled writedown in its letter, German newspaper Frankfurter Allgemeine Zeitung reported last month the insurer would have to book a charge of 500 million euros ($688 million).
Solberg said yesterday in an interview that she had not seen the letter and that it would be a matter for the energy minister to deal with. Melanie Epp, a Munich-based spokeswoman for Allianz, yesterday declined to immediately comment.
The tariff changes blindsided investors, who had spent 32 billion kroner buying a 44 percent stake in Gassled from oil companies including Statoil ASA (STL) and Royal Dutch Shell Plc. (RDSA) Other investors in the network include the Canada Pension Plan Investment Board and a company owned by UBS International Infrastructure Fund and CDC Infrastructure SA.
Solveig Gas, part owned by Allianz, is the second-largest shareholder in Gassled after state-owned Petoro AS, after buying a 24.8 percent stake in 2011.
“At the time of the sale, we were reassured by the Ministry of Petroleum and Energy that no adjustments to the existing regulation were planned,” Diekmann and Zimmerer said in the letter. “It was much to our surprise that less than one year later it was announced that major components of the tariff were to be cut by 90 percent starting in 2016.”
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