Norway’s wealth fund cuts oil investment
NORWAY’S sovereign wealth fund will begin dropping oil and gas companies from its trillion-dollar investment index in a decisive blow to the future of the fossil fuel industry.
The world’s largest sovereign wealth fund is expected to scale back its investments in oil firms, worth almost $40bn (£31bn), after ministers gave in to calls for it to shun hydrocarbons.
The Norwegian government said it would rule out investments in the energy sector’s exploration and production companies to protect its economy against the declining demand for oil.
It will take aim at those firms that focus solely on discovering and developing oilfields to produce oil and gas, rather than oil companies that are able to adapt to the global energy transition.
Up to 47 US oil explorers have been identified as investments that could be abandoned as part of the overhaul, many of them in the US shale heartlands.
The sell list also names five Uk-listed companies: Premier Oil, Tullow Oil, Nostrum Oil and Gas, Soco International and Ophir Energy.
Together the UK holdings were worth $91.4m to the Norwegian fund at the end of 2018, excluding its holding in Soco, which was not on its register at the time.
Meanwhile it plans to keep hold of its stake in the country’s state-owned oil giant Equinor, formerly known as Statoil, which wants to plough up to a fifth of its spending into “new energies” by 2030. It will also continue to hold a stake in BP and Shell, which have wider interests beyond drilling and pumping crude.
“The objective is to reduce the vulnerability of our common wealth to a permanent oil price decline,” the Norwegian finance minister, Siv Jensen, said.
The fund holds a 2.45pc stake in Shell and a 2.31pc share of BP.