Oil Slump Hits World’s Largest Wealth Fund Hard
Oil’s demise over the last year is about to hit Norway’s $860B wealth fund—the government has yet to figure out how to deal with a drop in payouts from Statoil ASA.
Norway owns 67% of the oil producer, which recently announced a scrip dividend, which will let investors take socks in lieu of cash, Bloomberg reports. But Norway is determined to keep its stake intact, and will have to accept a lowered cash payout.
The Norwegian government didn’t see this coming, and so didn’t prepare for it in its revised budget released last month. That means the world’s largest wealth fund will almost certainly need to increase its first-ever withdrawal from the fund, but that won’t force it to sell assets—it pulls in over $30B a year simply from dividends, rental payment and interest. [Bloomberg]
