Friday 6 December 2019

Norway dipping into €740bn fund amid oil woes

Oil has dropped below $30 a barrel. Photo: Bloomberg
Oil has dropped below $30 a barrel. Photo: Bloomberg

Saleha Mohsin

With oil dropping below $30 a barrel, producers in western Europe's biggest crude exporting nation are now considerably worse off than they were in the darkest hours of 2008.

Norway's oil "industry is in a crisis now, we can't deny that," said Bente Nyland, director general of the Norwegian Petroleum Directorate. Mr Nylan said there's a tendency for oil companies to prioritise short-term earnings rather than "long-term value creation," as prices fall.

But the government is ruling out further stimulus. Finance Minister Siv Jensen said budget proposals put forward last year already contain "a lot of expansion" and will help stem job losses. The administration is now pegging its hopes to a currency devaluation that has tracked oil's decline and helped exporters in other industries.

It's also stepping up its reliance on its €740bn wealth fund - the world's biggest - to deal with budget holes. "The financial crisis was nothing compared to this," said Teodor Sveen Nilsen, an analyst at Swedbank. (Bloomberg)

Irish Independent

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