Scepticism mounts over Norway’s proposed diversification

Scepticism mounts over Norway’s proposed diversification

Norwegian officials have expressed growing concerns over the decision to diversify from oil and gas in the country’s sovereign wealth fund.

Officials have said that although it is a decision that will have to be made and cannot be avoided, there is a good chance it will be delayed or even shelved as it would drastically limit the streams of revenue for the country.

The momentous decision to sell its oil and gas stocks was recommended by the world’s largest sovereign fund and puts Norwegian policymakers in a difficult position on whether to leave the fund exposed to oil prices or diverse away from the commodity that it was built on.

One Norwegian official said: “I think the government will try to park this discussion. But they can’t avoid it for ever because Norway will still be massively exposed to the oil price. What is Norway about? What is the fund going to be? This debate is coming one way or the other.”

While prices of Brent crude have bounced back from a long term bad spell and are once again over the $60 mark, oil prices remain under threat from increasing levels of output from the US.

Yngve Slyngstad, the oil fund’s chief executive, countered his own proposal in November stating the stocks under discussion only account for 8% of the total value of Norway’s oil in the ground, meaning that holding onto them would be more beneficial in the future than selling now.

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