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Norway to tap oil fund as revenues plummet

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 Norway to tap oil fund as revenues plummet
Norway's Troll oil platform, commissioned in 1995. Photo: Håkon Thingstad/Flickr
20:09 CEST+02:00
Falling oil revenues will see Norway delve into its massive sovereign wealth fund -- the world's largest -- to balance its books next year, according to budget plans unveiled on Wednesday.

According to the plans, the minority conservative government will need to take out around 3.7bn krone ($450m) from the fund, which is currently estimated at some $830bn.

Prices of crude have collapsed in recent months, cutting Norway's tax receipts from petroleum extraction activities and dividends by some two fifths, leaving a hole in the 2016 budget.    "We had expected this ... to occur later, around 2020. But it has happened earlier thanks to the fall in oil prices," DNB financial services group economist Kyrre Aamdal told AFP.

"This is a milestone -- but it is not of great importance as the fund should continue to grow," he added.

By the end of next year, the fund -- whose role is to pay for future welfare spending and pensions -- is set to top 7.449 billion krone (804 billion euros/$904 billion), up from 7.025 billion.

Earlier this year, Norway's central bank indicated that government transfers to the fund could be threatened once oil prices slid below some $60 per barrel.

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