The Petroleum Fund of Norway is a government controlled fund owned by the people of Norway. Also called The Petroleum Fund.

The purpose of the fund is to invest parts of the large trade surplus generated by the Norwegian petroleum sector. It is predicted that revenues from the petroleum sector have reached their peak and will decline significantly over the next couple of decades. The Petroleum Fund was established in 1990 after a decision by the Norwegian Parliament to counter the effects of the forthcoming decline in income and to smooth out the disrupting effects of highly fluctuating oil prices.

The fund is administred by the Norwegian Central Bank . It reached a portfolio value of more than $120 billion in 2003. The portfolio is predicted to reach a value of more than $ 200 billion by 2010.

Since 1998 the fund was allowed to invest up to 50% of its portfolio in the international stock market.

Debate

Due to the relatively large size of the fund relative to the low number of people living in Norway (4,5 million people), the Petroleum Fund has become a hot political issue. The three major themes of discussion are:

1. If one should use more of the current oil revenues to solve current problems instead of putting the wealth into financial "gambling" through The Petroleum fund.
2. If the investment policy of The Petroleum Fund is ethical.
3. If the high exposure (around 40% in 2003) to the highly fluctuating stock market is financially safe.

Part of the investment policy debate are related to the discovery of several cases of investment by The Petroleum Fund in highly controversial companies, involved in bussinesses such as arms production and tobacco. The Norwegian Parliament has discussed the need for a set of ethical guidelines for the investments. This debate has also led to the establishment of rather small portfolio for eco-friendly investments within The Petroleum Fund.

See also

• Economy of Norway
• Energy Resources of Norway

External link

• Official site