The value of the State’s Direct Financial Interest (SDFI) as of 1 January 2014 is estimated to 1,234 billion NOK. This is the result of the recent valuation of the SDFI portfolio carried out by Rystad Energy on behalf of the Ministry of Petroleum and Energy.
- The report illustrates the substantial values the SDFI portfolio represents to the Norwegian State. The annual net cash flows from the SDFI portfolio, which in 2012 and 2013 was 147 and 125 billion NOK respectively, represent a major contribution to the Government Pension Fund – Global, says Tord Lien, the Norwegian Minister of Petroleum and Energy.
The SDFI portfolio has, along with the overall oil and gas industry, been subject to slightly downward trending oil prices, increasing costs and weaker free cash flow.
Increase in expected production has contributed to increased value from 2012 till 2014. This is primarily due to upgraded resource estimates for discoveries such as Johan Sverdrup and Johan Castberg, as well as producing fields, like Snøhvit and Oseberg. Cost inflation has led to a higher increase in investments than expected from the increase in resources alone. As a result the value of the SDFI portfolio is almost the same in 2014 and 2012, despite significant positive net cash flows during the period.
- Continued optimization of recovery and utilization of the resources in our existing fields and discoveries is of great importance. The government believes it is crucial that the SDFI portfolio is actively managed and safeguarded in a sustainable manner, says the Minister.
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.