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Trading and distribution
How are oil and gas resources traded in your jurisdiction and what (if any) regulations and procedures apply to oil and gas sales, distribution and marketing activities, both nationally and internationally?
The oil from the Norwegian continental shelf is normally sold ex-platform and either transported by pipeline (approximately 20%) to onshore terminals in Norway or the United Kingdom, or is loaded offshore on to shuttle tankers (80%) and sold globally. The natural gas is normally sold ex-platform and transported by pipeline to either the United Kingdom or the European continent to large-scale customers.
Oil and gas trading in Norway is regulated by general applicable law (eg, competition law and marketing law), and each licensee is responsible for selling its own share of oil and natural gas production from the production licence. Thus, there is no joint sale of petroleum from the production licence.
The joint operating agreement stipulates procedures relating to oil lifting and natural gas lifting and balancing. Natural gas sales are contingent on booking of transport capacity in the existing gas pipeline network.
Is oil and gas pricing regulated in your jurisdiction?
The oil and natural gas prices are not regulated as such, and producers (licensees) may negotiate prices freely in the market pursuant to general competition law. However, for tax purposes a tax reference pricing system (norm price) is established. The norm price should correspond to the price at which petroleum could have been traded between independent parties in a free market.
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