The Norwegian state has large holdings in oil and gas licences on Norway’s continental shelf (NCS) through the State’s Direct Financial Interest (SDFI). These are managed by Petoro AS. The company’s most important job is to help ensure the highest possible value creation from the SDFI – value which benefits the whole of Norway.
2014 was the year of a sharp downturn in the industry. Driven by a high level of costs and a switch by the oil companies from volume to value, the willingness to invest on the Norwegian continental shelf (NCS) has been reduced.
The letter of assignment describes the framework and priorities, targets and reporting requirements for the company in 2014. In this chapter Petoro describes the company's performance in relation to this.
Managing the portfolio is subject to the accounting regulations for the government. Accounts for the portfolio are presented both on the cash basis used by the government and in accordance with the Norwegian Accounting Act.
The company maintains separate accounts for all transactions relating to the participatory interests, so that revenue and expenses for the portfolio are kept apart from operation of the company. Petoro’s operating revenue takes the form of a contribution from the government. Group accounts also include the accounts for Petoro Iceland AS.