The Ministry of Petroleum and Energy proposes expenditures of NOK 17.7 billion and income of NOK 83.2 billion in the 2003 budget. The most important measures will be related to the following:

• Increased commitment to research and development
• Prioritising the work for sustainable changes in energy use and energy production
• Establishment of a Nordic investment fund for change abatement measures in the Baltic Sea Region.

Research and development
For 2003 the Government proposes to allocate NOK 304.7 million to research and development in the energy sector, an increase of NOK 35.6 million. The increase is mainly related to research in the cross-field between energy and the environment and innovation. The focus is within petroleum research, including long-term effects of discharges to sea. Research on use of natural gas for energy purposes, hydrogen and renewable energy are also priorities in 2003. The increased research efforts related to the development of sequestration technology for gas fired power plants will be continued with NOK 50 million.

Change in energy use and energy production – Enova SF
The Government proposes a budget of NOK 318 million for change in energy use and energy production, of which NOK 279 million will be transferred to the Energy Fund. In addition to the yearly state contribution, the Energy Fund will be financed by a mark-up on the electricity transmission tariff, amounting to approximately NOK 200 million. The NOK 480 million totally will strengthen Enova's work in altering energy use and energy production in 2003.

The estimated financial grant given to producers of wind power is NOK 14 million in 2003, an increase from NOK 3.5 million in 2002, due to large windmill parks like Smøla and Havøygavlen having started their production.

Establishment of a Nordic investment fund
The Nordic ministers of energy and of the environment have decided to establish a common investment fund for Joint Implementation Projects in the Baltic Sea Region. The fund is one of the elements of the inter-governmental co-operation to establish a Testing Ground for implementation of the flexible mechanism under the Kyoto Protocol in the Baltic Sea Region. It is proposed to allocate NOK 8.1 million to the investment fund in 2003.

The petroleum activity – SDFI
The total net cash flow from state petroleum activity is estimated at approximately NOK 172.8 billion. The net cash flow consists of about NOK 61.5 billion in net income from the state's direct financial interest (SDFI), NOK 106.6 billion in taxes and NOK 5 billion in stock dividend from Statoil.The dividend from Statoil is a technical projection based on dividends paid in 2002. Other net expenditures are related to disposal of installations on the Norwegian continental shelf, and operating cost for Petoro AS administering the SDFI.

SDFI's operating profit for 2003 is estimated at approximately NOK 54.8 billion. The current oil price estimate is NOK 180 per barrel for 2003. SDFI's share of investments on the Norwegian continental shelf is estimated at approximately NOK 15.1 billion.