You won’t meet anyone in Oslo who doesn’t know the answer to the question of which oil fund lived oil fund so officially Statens pensjonsfond utland is.
– Oh, I’m thinking: a lot of money. And that we are lucky to have a large oil fund, answers Sandra Bruflot On Oslo’s main street, Karl Johan.
Oil was first discovered in Norwegian sea areas in the late 1960s. The Norwegians understood that one day the oil will run out and money cannot be wasted, but must be accumulated for the next generations.
The fund according to the current model was established in the 1990s.
Norway’s oil fund was one of the world’s largest investment funds even before the Russian attack on Ukraine in February 2022. Western sanctions on Russia stopped the supply of gas and oil to Europe. Prices skyrocketed and Norway became Europe’s largest supplier of gas.
The oil fund’s market value rose sharply after the start of the war and was 1316 billion converted into euros on Monday at 2 p.m. The amount is about 16 times larger than this year’s budget of the Finnish government.
In 2020, the value of the fund was one-third smaller than it is now.
The fund is so large that today more than half of its income comes from investments and less than half from oil and gas. The Norwegian state has its own companies operating in the sector and strictly taxes all operators in the sector. The oil fund currently has investments in 9,200 companies around the world. It may only be invested abroad.
A part of the billions produced by the war goes to Ukraine
It is difficult for many people in Oslo to accept that Norway will become prosperous as a result of the war.
– I find it boring to think that such things bring us more money. But the Norwegian state is trying its best to help Ukraine. We certainly belong to the countries that help Ukraine the most in proportion to the population. But it does feel bad that we earn money because others suffer, he says Merete Jansen.
Karl Juan Martin Pebaque largely agree.
– I think it is necessary to help Ukraine and Ukrainians and to end the war. That’s what I think. Then you can use part of the oil fund to help Ukraine.
The oil fund facilitates the work of parliamentarians
The oil fund is managed in connection with the Norwegian central bank. It is independent of political decision-makers.
On the other hand, the oil fund brings relief to the politicians, as a maximum of three percent of the fund’s income can be used to cover the state budget each year. Three percent may sound small, but it is not.
The vice-chairman of the Finance Committee of the Norwegian Parliament, the Prime Minister’s Party Social Democrats Lise Christoffersen according to this year, three percent will bring 32 billion euros to the revenue side of the budget.
Christoffersen admits that the oil fund billions make the work of politicians easier.
– These billions will mainly go to support Ukraine and price and wage revisions in the budget. We have not had to cut spending on health care, welfare services or education, Christoffersen emphasizes.
The Norwegian Grand Chamber unanimously decided on the so-called About the Nansen support package for Ukraine. Over the next five years, Norway will support Ukraine with a total of 6.5 billion euros. In addition, this year the support will be increased by an additional 400 million euros.
Norway’s economic and military aid to Ukraine is the largest in the Nordic countries.
The environmental organization WWF is dismayed by the new drilling permits
WWF Norway operates right in the center of Oslo in the labyrinthine upper floors of an old stone house.
Ragnhild Waagaard leads the climate and energy group of WWF Norway. Of him, no Norwegian would certainly criticize the establishment and existence of the oil fund, but in the WWF’s opinion, the current attitude towards oil drilling leaves a lot to be desired. According to Waagaard, the Norwegian government says it is committed to climate goals, but at the same time grants new drilling permits in increasingly sensitive sea areas.
– The oil industry is a big hippopotamus in the living room that influences all decisions in Norway. It is really problematic that we are tying up capital and resources to a business that is declining all over the world, Waagaard criticizes.
According to the Norwegian WWF, there is an oil boom going on in Norway right now, because the government reversed its November budget decision not to grant oil drilling permits to previously unused areas in this election period, i.e. until 2025. Now however, the government has granted new permits so that they have been interpreted to be part of drilling areas already in use.
An economics major pursues global responsibility from Norway
Knut Anton Mork is a retired economics professor and non-fiction writer who has focused specifically on the effects of the oil price on the national economy.
Morki has three suggestions for improvement directly related to Norway’s oil policy.
In Mork’s opinion, the permission to take three percent of the oil fund’s income for budget expenditures makes the job of politicians too easy, when expenditures do not have to be prioritized. Mork estimates that two percent or even slightly less would be a more appropriate number.
Mork would also stop oil drilling for environmental reasons.
In addition, he would separate part of the oil fund into his own separate fund, which would be used to combat the global climate crisis. In Mork’s opinion, it is Norway’s responsibility as a major producer of climate emissions.
– It might sound like a drug lord would give money for rehabilitation, but it’s the least we can do, Mork reasons.
The subject can be discussed until 23.06 on 20 June 2023.