2003 record year for Norwegian petroleum revenue fund

The year 2003 became a record year for the Norwegian petroleum revenue fund with a yield of 12.6 % when measured in international currency.
The Norwegian petroleum revenue fund increased with an amazing NOK 236 bn ($ 33.7 bn) last year, making it the highest yield since the opening of the petroleum revenue fund in 1997. About half of the yield is due to new means transferred from the oil industry. The majority of the remaining yield is due to dividends on debentures and stock.

At the end of 2003, the value of the Norwegian petroleum revenue fund amounted to NOK 845 bn ($ 120.7 bn), according to numbers presented by Norges Bank. The fund is now the largest pension fund in Europe and among the largest in the world.
The value of the share portfolio, which is about 40 % of the total petroleum revenue fund, increased with as much as 22.8 %. From 1997 to 2003, the annual average yield after management costs has been 3.7 %. 2002 was a terrible year in comparison when the value of the share portfolio decreased 24.4 %, making politicians raise questions regarding if the risk was too great.

"Such fluctuations may be a problem if the will to take risks is reduced during slumps," said Svein Gjedrem, governor of the Norwegian central bank, during the presentation of the result.
"The strategy the Ministry of Finance has established for the petroleum revenue fund required that all the new resources transferred to the fund when the stock market was close to the bottom were used to by stock. This is strength for the petroleum revenue fund that the strategy is robust in accordance to the fluctuations in the yield."

Due to the weaker exchange rate of the Norwegian Kroner, the value of the petroleum revenue fund increased with NOK 41 bn ($ 5.9 bn) if calculated in Norwegian Kroner from 2002 to 2003.