Norway’s $1.1 trillion sovereign fund will divest from companies that are solely dedicated to oil and gas exploration and production, while maintaining stakes in refiners and other downstream firms, the country’s Finance Ministry said on Tuesday.
Norway’s Parliament earlier this year endorsed a plan to cut some oil firms from the fund’s portfolio, but it was left to the government to define the scope of the exclusion.
The move will partly shift the rainy day fund away from oil and gas, as called for by the central bank, which had originally sought to cut all petroleum producers in order to better protect the country from a potential future fall in prices.
The decision to divest affects the fund’s holdings in some 95 companies, with the value of its stakes amounting to around 54 billion Norwegian crowns ($5.92 billion) as of mid-September of this year, the ministry said in a statement.
An earlier decision to maintain investments in so-called integrated oil majors, including Shell and ExxonMobil Corp, remains in force and was not part of the latest review.
Norway, Europe’s second-largest producer of oil and gas after Russia, saves proceeds from its petroleum industry in foreign stocks, bonds and real estate in what has become the world’s largest sovereign wealth fund.
The government opposed a full ban, arguing that major oil firms have the scale and technological ability to shift towards renewable energy.
The divestments would take place gradually and over time, the ministry said.
Source: Reuters.com