"We currently have a stabilization fund, which will be split into a Reserve Fund and a National Welfare Fund. Part of the latter will be invested in stocks and part in bonds," Kudrin said through a translator.
Kudrin, who is attending a ministerial conference in Oslo, also said the Central Bank would continue to manage the Reserve Fund, which should be readily available to cover budget shortfalls.
He said a special agency or a private asset management company might manage the National Welfare Fund's assets, but the investment model is still being finalized.
"As for the National Welfare Fund, its investments will be carried out by an agency or some company, the formula is still being discussed," Kudrin said.
The ministry is currently working on detailed proposals regarding the future oil windfall investments, which will go to the Cabinet for approval in June, Kudrin said.
The oil windfall policy is closely watched by investors since it indicates the government's commitment to fiscal prudence in a year when Russia elects a new State Duma and prepares to vote to elect a successor to President Vladimir Putin.
Putin alarmed financial markets last month when he suggested that part of the windfall could be used to support domestic stocks. He later retracted his statement.
Russia plans to tap the stabilization fund for $11.58 billion in 2007 to fund infrastructure and high-tech investment.
Kudrin said the investment structure of the National Welfare Fund would be similar to Norway's state pension fund, 60 percent of which is invested in stocks and 40 percent in bonds.
"We will have limitations that will be similar to Norway's," Kudrin said.
Russia carefully studied the experience of other resource-rich countries when it created the stabilization fund, now at $113.7 billion, in 2004 to cushion the budget from a fall in international oil prices.
According to the new Budget Code, the stabilization fund will be replaced in 2008 by an Oil and Gas Fund, which will collect all the country's energy revenues.
Oil and gas revenues will be stripped out of the budget, which will then run in deficit.
The new fund will then be split on Feb. 1, 2008 into a Reserve Fund, which will be used in part to cover the budget deficit, and a more growth-oriented National Welfare Fund.
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