SDFI values of 865 billion kroner

The value of the State’s Direct Financial Interest (SDFI) as of 1 January 2010 is estimated at 865 billion kroner. This is the result of a valuation of the SDFI portfolio carried out by Wood Mackenzie on behalf of the Ministry of Petroleum and Energy. 

- The report illustrates the substantial values that the State’s direct ownership in the petroleum sector represents. The annual cash flow from the SDFI portfolio constitutes a major contribution to the Government Pension Fund – Global, says the Minister of Petroleum and Energy, Terje Riis-Johansen.

The analysis shows an increase in value of approximately NOK 150 billion compared to the previous valuation of the portfolio in 2008. This increase is mainly explained by higher estimates of future oil and gas prices. Over the same period there has been a significant increase in costs on the Norwegian Continental Shelf. This development illustrates the importance of continuing our commitment to reducing costs and to accommodate for the future value creation from the petroleum sector.

- The analysis also shows the long-term perspective of the SDFI portfolio despite the presumption of declining production in the years to come. In this perspective it is crucial to achieve the highest possible recovery of resources from each field. It is of great importance that the portfolio continues to be managed in an active and sound manner, says Minister Terje Riis-Johansen.

The valuation of the assets has been undertaken with the price scenarios used in the 2008 Revised National Budget submission and in the 2010 Revised National Budget submission.

The valuation of the SDFI-portfolio is part of the Ministry of Petroleum and Energy’s follow-up of the SDFI and Petoro AS. Petoro manages the SDFI on behalf of the government.

The report from Wood Mackenzie.