A very small mistake can sometimes be very costly. In any case, Norway’s sovereign wealth fund experienced this last year. The world’s largest fund lost 980 million Norwegian kroner, or more than 86 million euros, due to a simple error related to a benchmark index in an Excel spreadsheet. Financial Times On 9 February.
Thus, Norges Bank Investment Management (NBIM), which manages the sovereign fund, declared that this was a mistake “ This resulted in a marginal overweighting of US fixed income relative to global fixed income “
” When this error was discovered we immediately decided to correct it, but the return was 0.7 basis points due to the size of the fund. As a result, the positive return of NOK 118 billion that we announced earlier fell to NOK 117 billion. », explained the fund in particular.
A small operational error that is not new. A Norwegian investment bank also made about 52 million euros in 2021, after a blunder in financial markets, the British daily reports. A mistake that, this time, was favorable to him compared to this one.
cell error
But what happened to the Norwegian fund to make such a mistake last February? An employee of a Norwegian bank named “ Simon », described the origins of awkwardness: “My worst nightmare. It was a manual error. My mistake. I got the date wrong, December 1st instead of November 1st. “
While a year ago during a workshop “ Errors and how to deal with them “, the employee has classified this type of error in the category “ Unforgivable “, Less than a year later, he made a mistake, he says. The mistake was disclosed by the Finance Ministry only a few months later. By redoing all the calculations, the employee realized his mistake: “ I was hurt and I was ready to suffer the consequences », he adds.
Shortly after the fund management was informed, Managing Director of NBIM Nikolai Tangen assured “ Simon » as well as the bank’s global head of risk monitoring.
” These are the things that happen! We do complex operations and I am even more surprised that historically we have had very few or no incidents of this nature. Both of you are very professional and contribute a lot to the success of NBIM », he specifically wrote to them.
A mistake that still needs to be put into perspective considering the size of the fund. As a reminder, the Norwegian sovereign wealth fund is worth 15,765 billion kroner or 1,395.5 billion euros at the end of 2023. It is supposed to increase Norway’s oil and gas revenues, especially to finance welfare state spending.
Placed primarily in stocks and bonds, the fund also experienced a record return of 197 billion euros in 2023, driven by technology stocks and the weakness of the Norwegian currency. So it has shares in more than 8,000 companies in 72 countries of the world.
Norwegian oil sector plans record investments
Oil companies operating in Norway plan to invest a record amount in the exploration, extraction and transportation of hydrocarbons in 2025, according to preliminary figures released on Thursday by Statistics Norway SSB.
The data, gathered from an overview of operators, is published two months after the climate summit in Dubai, where the international community agreed to gradually move away from fossil fuels. For their part, companies in the sector plan to invest 205 billion crowns (18 billion euros) next year in the Scandinavian country, which has become Europe’s biggest supplier of natural gas following the Russian invasion of Ukraine.
Never before has such an amount of investment been planned at such an early stage. This figure is 15% higher than the 2024 investment forecast for the same period in 2023, SSB clarifies.
In general, estimates are periodically revised: planned investment for the current year has thus been increased by a further 5% compared to the estimates collected in November, which had already increased significantly. In 2024, they are expected to reach 244 billion crowns, which is also a historically high figure.
While Norway is regularly under fire for its hydrocarbon production, Oslo defends itself by citing the importance of jobs, skills development, but also guaranteeing a stable supply of energy to other Europeans.
In January, Norwegian courts invalidated three oil licenses because the climate impact of these projects, including the combustion of hydrocarbons that release or release them, had not been sufficiently studied. The Ministry of Energy appealed. From 2021, the International Energy Agency (IEA) is urging the world to freeze any new oil exploration projects in order to limit global warming to 1.5 degrees Celsius compared to pre-industrial levels.
(with AFP)
