INTERVIEW-Norway should cut Statoil stake-opposition leader

OSLO, April 30 Tue Apr 30, 2013 9:54am EDT

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OSLO, April 30 (Reuters) - Norway's likely next prime minister called on the state to cut its stake in Statoil from two thirds to just over a half and diversify the oil-reliant economy.

Opposition Conservative Party leader Erna Solberg told Reuters that Norway, whose $735 billion sovereign wealth fund is among the biggest in the world, should sell billions of dollars worth of shares in large listed firms.

"We won't sell just to sell, but rather to give companies better development prospects," Solberg told Reuters as her party prepared to approve an election platform focused on privatisation, moderate tax cuts and public sector reforms.

At current prices, a sale of 16 percent of Statoil and a reduction in the 54 percent stake in telcoms firm Telenor to about one third would fetch around 110 billion Norwegian crowns ($19 billion).

The Conservatives hope to form a coalition with the right-wing Progress Party and two small centrist ones with polls showing the four could win around a 100 seats in Norway's 169-seat in elections in September.

Solberg said the state should maintain large holdings in private companies as Norway has a long tradition of state ownership in corporations.

"It's important for us to keep the headquarters of global firms like these in Norway, and typically much of their research. These are benefits of being owners," Solberg said, but added that current stakes are bigger than necessary.

ECONOMIC REFORMS

Solberg said Norway is too dependent on its vast oil sector and must encourage growth in other industries to protect the economy from price swings that could cause a drop in offshore investments.

"The potential for considerably lower oil prices is the number one economic challenge," she said, adding that new sources of energy, such as shale oil and gas, could dampen the current boom.

"It was only 14 years ago that the oil price stood at 10-11 dollars per barrel. That's why we're so concerned with stimulating growth in other parts of the economy," Solberg added.

North Sea crude currently trades at 103 dollars per barrel and is forecast to give Norway a budget surplus of some 380 billion crowns this year, much of which will be stashed in its wealth fund.

Given the huge surplus, Solberg said Norway would not sell down equity stakes just for the sake of doing it and would wait for top prices.

Norway, the world's seventh biggest oil exporter and Western Europe's top gas supplier, generates a fifth of its GDP from the energy sector.

Under a fiscal spending rule endorsed by both the Conservatives and Labour, governments can spend around four percent of the fund's value per year.

Solberg argued that the current boom should be used to skew public funds towards education, research, infrastructure and tax cuts, and said Labour and its smaller partners were too fond of discretionary spending. ($1 = 5.8225 Norwegian krones) (Editing by David Cowell)

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