Read news from:
Austria
SHARE
COPY LINK

OIL FUND

Norway’s massive wealth fund had historically bad month

Norway said on Friday it had, for the first time, drawn out more cash from its huge sovereign wealth fund in January than it paid in, as the oil-rich nation grapples with plummeting crude prices.

Published: 7 March 2016 09:31 CET
Norway's massive wealth fund had historically bad month
Norway has been hit hard by the 70 percent fall in crude prices since 2014. Photo: Håkon Mosvold Larsen / NTB scanpix
“State oil revenues have fallen considerably, and for the first time in a long time have become less than the national budget deficit,” state secretary for finance Paal Bjornestad said in an email to AFP.
 
The government withdrew in January a net 6.7 billion kroner (€713 million, $780 million) from the fund — much more than the 4.9 billion kroner forecast last year by the right-wing government for the whole of 2016.
 
The fund was as of early Friday stocked with a total 7.0 trillion kroner.
 
The sovereign fund, the world's biggest, is fuelled by Norway's huge oil and gas revenues and is intended to pay for future generations in the welfare-state after the country's wells run dry.
 
Its investment policy is run according to strict ethical rules, with a focus on sustainable economic, environmental and social development.
 
The government is only permitted to withdraw up to four percent from the fund to help balance its budget.
 
Norway, like other oil producing countries has been hit hard by the 70-percent fall in global crude prices since mid-2014 due to a supply glut.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

OIL FUND

Norway oil fund loses 18 billion euros in first half of 2020

Norway's huge sovereign wealth fund, the world's biggest, lost 188 billion kroner (18 billion euros, $21 billion) in the first half of the year as the global economy reels from the Covid-19 pandemic, the central bank said Tuesday.

Published: 18 August 2020 15:48 CEST
Norway oil fund loses 18 billion euros in first half of 2020
Unusually empty slopes and ski lifts in Hemsedal in April. Photo: AFP

The fund, in which the Norwegian state's oil revenues are invested, was hit by plummeting share prices, with stocks accounting for 69.6 percent of its investments.

Its share portfolio posted a negative return of 6.8 percent in the first six months of the year.

At the end of June, the fund was valued at 10.4 trillion kroner (989 billion euros), up from the 9.98 trillion kroner seen at the end of the first quarter.

“The year started with optimism, but the outlook of the equity market quickly turned when the coronavirus started to spread globally,” the fund's deputy chief executive, Trond Grande, said in a statement.

“However, the sharp stock market decline of the first quarter was limited by a massive monetary and financial policy response,” he added.

Real estate investments, which represent 2.8 percent of the portfolio, also posted a negative return, of 1.6 percent, while bond investments, which account for 27.6 percent of assets, posted a gain of 5.1 percent.

“Even though markets recovered well in the second quarter, we are still witnessing considerable uncertainty,” Grande said.

The fund is meanwhile still mired in controversy over the appointment of a new chief executive.

Nicolai Tangen, a billionaire who founded the AKO Capital hedge fund in London, is due to take over the fund on September 1st, replacing Yngve Slyngstad who is retiring.

But critics have complained about Tangen's possible conflicts of interest, as well as his use of tax havens.

The central bank has meanwhile been criticised for irregularities in the recruitment process.

As a result, some major political parties are opposed to Tangen's appointment, and it remains up in the air.

READ ALSO: Norway's oil fund loses 1.3 trillion kroner ($125bn) in coronavirus crash

SHOW COMMENTS