The "trillion pound" oil fund the government believes Britain could have built
Summary
The UK government has started a new Energy Wealth Fund with £2 billion taken from the existing National Wealth Fund. This fund aims to invest the money from North Sea oil and gas revenues to support future generations, similar to Norway’s successful oil fund.Key Facts
- Chancellor John Healey announced the Energy Wealth Fund during the approval of the Jackdaw gas project.
- The UK has earned around £200 billion from North Sea oil and gas over past decades but did not create a large sovereign wealth fund like Norway.
- Treasury officials estimate that if the UK had invested these revenues like Norway, the fund could be worth about £1 trillion today.
- Norway’s sovereign wealth fund started in 1996 and is now over 1000 times larger than its initial investment.
- Norway invests mainly overseas and uses about 3% of the fund’s value yearly to support government spending.
- The UK’s new fund will focus on investing in domestic green energy projects, which may yield different returns than Norway’s fund.
- North Sea oil production is expected to slow down, but projects like Jackdaw may extend its life.
- The UK's fund is a recent initiative aiming to avoid past missed chances to save and invest oil revenues.
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