The Ministry of Petroleum and Energy proposes expenditures of 22.56 billion Norwegian kroner (NOK) and income of NOK 81 billion in the 2004 budget. The most important measures will be related to the following:

• Prioritising the work for sustainable changes in energy use and energy production.
• Increased commitment to petroleum research
• Increased commitment to research related to the development of sequestration technology for gas fired power plants
• Increased safety in landslide areas.

Change in energy use and energy production – Enova
The commitment to supply security and change in energy use and energy production through the Energy Fund and Enova SF will be strengthened in 2004. The mark-up on the electricity transmission tariff increases from 0.3 to 0.8 øre per KWh in 2004. This will increase the income to the Energy Fund from approximately NOK 190 million in 2003 to approximately NOK 460 million in 2004 (520 million yearly). In addition to income from the mark-up, the Government proposes to transfer NOK 130 million to the Energy Fund over the State Budget. Including income from interests, the income to the Energy Fund will increase to approximately NOK 600 million in 2004, an increase of NOK 130 million compared to 2003.

The Government also proposes to allocate NOK 19 million to stimulate increased onshore use of natural gas in 2004.

Research and development
For 2004 the Government proposes to allocate NOK 321.4 million for research and development in the energy sector, an increase of NOK 61.7 million – approximately 24 per cent – compared to 2003. The increase is mainly related to a new research program within the petroleum sector (NOK 28.5 million) and increased commitment to research related to developing sequestration technology for gas fired power plants (NOK 30 million).

The Government proposes to allocate totally NOK 50 million to strengthening the development of technologies and solutions for reducing emissions from gas fired power plants. The Government also proposes to increase the commitment related to micro scale power plants through the Norwegian Water Resources and Energy Directorate.

Increased safety in landslide areas
The Government proposes to allocate NOK 69.25 million for landslide preventing constructions along watercourses, an increase of NOK 14.4 million compared to 2003. The increase is mainly related to the program for increased safety in clay landslide areas, which will be strengthened in 2004. Areas in Trøndelag, Skien and Porsgrunn have clay landslide problems. Comprehensive work must be carried out as soon as possible to prevent the risks of landslide in these areas.

The petroleum activity
The total net cashflow from State petroleum activity is estimated to approximately NOK 143.5 billion. The net cashflow consists of about NOK 54.1 billion in net income from the State's Direct Financial Interest (SDFI), NOK 84.3 billion in taxes and approximately NOK 5.1 billion in stock dividend from Statoil ASA. The dividend from Statoil ASA is a technical projection based on dividends paid in 2003.

SDFI's operating profit for 2004 is estimated to approximately NOK 52.4 billion. The current oil price estimate is NOK 170 per barrel for 2004. SDFI's share of investments on the Norwegian continental shelf is estimated to approximately NOK 19.7 billion, an increase of NOK 4.6 billion compared to 2003.

Statnett SF
The income from interests and guarantee commission related to the Ministry's loans to the state owned company Statnett are estimated to NOK 60 million in 2004. The expected dividend payments from Statnett amount to NOK 450 million for 2003.