The final value of the State’s Direct Financial Interest as at January 1, 2008 has been estimated to NKr 834.8 billion. This is the result of a valuation of the SDFI portfolio undertaken by Wood Mackenzie on behalf of the Ministry of Petroleum and Energy.
The Ministry's report illustrates the enormous values that the SDFI portfolio represents to the Norwegian State.
"Together with the tax revenues from the petroleum sector, the annual cash flows from the SDFI are important to Norway’s economy and constitute a major contribution to the Government Pension Fund-Global," said Minister for Petroleum and Energy Terje Riis-Johansen.
The valuation shows that since the start of 2006, the value of the SDFI portfolio has increased by NKr 42.4 billion. The increase is mainly due to high oil and gas prices. At the same time, the Norwegian Continental Shelf has been characterized by increasing costs.
By comparing the change in value of the SDFI portfolio from the start of 2006 to the end of 2007, the valuation shows an increased value of NKr 42.4 billion in 2008 terms. This result comes after the 2006 and 2007 actual cash flows have been realized.
The general increase in price assumptions and costs on the Norwegian Continental Shelf has had a major impact on the development of the portfolio’s value.
Wood Mackenzie has illustrated this by running the end 2007 dataset using start 2006 oil and gas price assumptions, in order to isolate the impact of changes arising from different oil and gas price assumptions. As a result of this, the portfolio shows a decrease in value of NKr 177.1 billion. Key reasons for this decrease in value include the impact of a combination of both new costs.
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