Norwegian $1 trillion wealth fund to drop oil and gas investments
Norway’s sovereign wealth fund will drop oil and gas exploration companies from its benchmark index, the country’s finance minister announced today.
The move aims to reduce risk to the $1 trillion fund, which is the largest in the world, from a “permanent oil price decline”.
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However the finance ministry said the divestment does not reflect any specific view on oil price, future profitability or sustainability of the sector.
In a statement the Norwegian Government said: “Companies classified as exploration and production companies by the index provider FTSE Russell will be excluded from the Government Pension Fund Global’s benchmark index and investment universe.
“The proposal will serve to reduce the aggregate concentration risk associated with this type of activities in the Norwegian economy.”
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Oil and gas stocks represented 5.9 per cent of the funds equity investments at the end of 2018, corresponding to about $37bn (£28.2bn), according to Reuters analysis of fund data.
The fund has been a major investor in oil firms, with a 2.45 per cent stake in Shell, 2.31 per cent in BP, 2.02 per cent in Total, 0.99 per cent in Chevron and 0.94 per cent in Exxonmobil.