It becomes the latest European utility company looking to exit offshore assets on the Norwegian continental shelf, which require heavy investment to develop.

VNG has hired U.S. investment bank Citi to sell a 51 percent stake in its Norwegian and Danish portfolio. That would include VNG's interest in the Fenja development – the largest recent North Sea oil discovery, whose estimated total development cost has been put at $1.4 billion (1.06 billion pounds), the sources said.

VNG is majority-owned by German utility EnBW (>> Enbw Energie Baden Wuerttemberg AG), which has a 74.2 percent stake.

Companies interested in VNG Norge include oil firm Point Resources, which is majority owned by HitecVision and has just bought ExxonMobil's (>> Exxon Mobil Corporation) fields off Norway; oil and gas company DEA, controlled by Russian billionaire Mikhail Fridman; and some medium-sized UK exploration and production (E&P) companies, the sources said.

VNG Norge and DEA did not respond to a request for comment. Citi declined to comment.

"Point Resources has recently finalised a major programme for transferring ownership and operatorship of the previous ExxonMobil-operated assets offshore Norway," Point Resources said in an emailed statement.

"We will make significant investments to increase oil recovery and in future development projects, while also considering inorganic investments," it added.

Other European utility companies that have divested offshore Norwegian assets recently include France's Engie (>> Engie), which sold its British and Norwegian North Sea fields, and British utility Centrica (>> Centrica), which combined its North Sea business with Bayerngas Norge, an unlisted arm of German Stadwerke Muenchen and Bayerngas.

(Reporting by Ron Bousso, Clara Denina and Arno Schuetze; Additional reporting by Nerijius Adomaitis; Editing by Susan Fenton and Adrian Croft)