Norway's Oil Savings At $100Bln

OSLO, Norway -- A gargantuan fund saving Norway's oil wealth has topped $100 billion for the first time, giving enough cash to buy every Norwegian a new car or 6,000 pizzas, central bank figures showed Tuesday.

The fund, set up in 1996 to save cash for future generations when oil and gas runs out, could soon overtake giants like the California Public Employees' Retirement System (Calpers), the biggest U.S. pension fund worth $131 billion.

Norway's so-called Petroleum Fund, invested in stocks and bonds abroad, jumped 12 percent to 682 billion crowns ($102.9 billion) in the three months to March 31 thanks partly to high oil prices linked to the war in Iraq, the central bank said.

But the rise masked a fall in the value of the share and bond portfolio by 1.7 percent in the quarter, hit by a global economic downturn. Kuwait, Abu Dhabi and the U.S. state of Alaska also stash away oil wealth.

Deputy central bank governor Jarle Bergo said Norway had generally resisted temptations to spend the oil cash even though rarely, in the course of human history, has so much been owned by so few.

"So far I think that there has been responsibility in managing the oil fund," he said. Norway is the No. 3 oil exporter behind Saudi Arabia and Russia and produces 3 million barrels per day.

The central bank often warns politicians against splurging the wealth, saying that Norway could suffer hyperinflation like Spain in the 17th century after a misspent infusion of gold from the Americas.

Norway's opposition far-right Progress Party has, for instance, suggested buying holiday homes by the Mediterranean. Newspapers often work out the value of the fund in terms of everyday items like glasses of beer, meals or new cars.

The oil fund works out at about 152,000 crowns for each of Norway's 4.5 million people. A popular brand of frozen pizza, for instance, costs about 25 crowns -- meaning each Norwegian could gorge 6,062 each.

Bergo said Norway should not view the fund as a magic wand to solve economic problems.

The government estimates that the fund will generate a 4 percent return per year and could rise to 150 percent of gross domestic product. "We can't live off that alone," Bergo said of the total injection of 6 percent of GDP per year.