State's Direct Financial Interest (SDFI) (
Norwegian: Statens direkte økonomiske engasjement (SDØE)) is a
portfolio of the
Norwegian government's directly owned exploration and production licenses for
petroleum
Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring un ...
and
natural gas
Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...
on the
Norwegian continental shelf. The Norwegian government-owned company
Petoro has managed the SDFI portfolio since 2001.
History and background
The Norwegian government claims ownership of all resources on and under the sea in the geographical area known as the Norwegian continental shelf. The Norwegian government awards production
licences to
cooperating companies
A company, abbreviated as co., is a legal entity representing an association of legal people, whether natural, juridical or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specifi ...
to find and produce petroleum in specific areas.
The Norwegian government creates income from the petroleum sector through
tax
A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...
es and
fees as well as itself being a participant in the industry. The Norwegian government initially participated in the industry through the creation and development of the state oil company
Statoil. From 1973 to 1985 the government awarded Statoil 50% or more of Norway's petroleum development licenses. In the 1980s political discourse questioned this arrangement as Statoil's
cash flow
Cash flow, in general, refers to payments made into or out of a business, project, or financial product. It can also refer more specifically to a real or virtual movement of money.
*Cash flow, in its narrow sense, is a payment (in a currency), es ...
was becoming very large in relation to Norway's
gross national product. The solution was splitting Statoil's ownership. SDFI was created on January 1, 1985, as a separate juridical entity managed by Statoil. Statoil's original portfolio was divided in two, with approximately 20% retained by Statoil itself, and the rest given to SDFI.
When Statoil was partially privatised in 2001 this solution was no longer desirable and a new state-owned management company
Petoro was created to manage SDFI. The Norwegian government also reduced the size of SDFI by 20%, with 15% of the portfolio going to Statoil and 5% to
Norsk Hydro.
Values in SDFI
Petoro is registered as owner for the states portions with permissions 93 licences. This also gives portions of production from 36
fields.
The states portion of the total reserves on the Norwegian shelf are as of January 1, 2005 294 million Sm
3 oil and 1005 mrd Sm
3 natural gas. This represent 24% of the oil reserves and 41.6% of the natural gas reserves, and makes Petoro the largest licenceholder on the shelf. As of January 1, 2006 the value of SDFI was
NOK 850 billion.
The states portion of the oil production on the shelf was in 2004 about 46.6 million Sm
3, 14% of the states reserves at the beginning of 2004.
In 2016 the value of SDFI was estimated at 810 billion kroner.
Fuel volumes
The table below lists all remaining field reserves as of January 1, 2005 where the state by Petoro has ownership in the production. The table shows percent ownership in the field, crude oil listed in million
standard cubic meters MSm
3 and in million barrels that belong to the state, gas in billion standard cubic meters GSm
3,
Natural gas liquids in million tonnes,
Natural gas condensate in MSm
3 and the total of all remaining petroleum in the field given in million
oil equivalents (oe).
All numbers are from the
Norwegian Petroleum Directorate.
See also
*
Constitutional economics
*
Political economy
Political or comparative economy is a branch of political science and economics studying economic systems (e.g. Marketplace, markets and national economies) and their governance by political systems (e.g. law, institutions, and government). Wi ...
*
Petroleum exploration in the Arctic
*
Natural resources of the Arctic
References
{{Reflist
External links
Norwegian Oil DirectoratePetoro
Government of Norway
Petroleum in Norway
Petroleum industry in Norway