Published: Sun, March 10, 2019
Money | By Ralph Mccoy

Norway's $1 trillion sovereign wealth fund to dump oil and gas shares

Norway's $1 trillion sovereign wealth fund to dump oil and gas shares

"The Government is proposing to exclude companies classified as exploration and production companies within the energy sector from the Government Pension Fund Global", the finance ministry said in a statement. "This makes Norway vulnerable to a permanent decline in the oil price".

Norway has the largest oil industry in Western Europe, and it accounts for about 20% of the country's output.

"The reason they are keeping them is because they think they might increase their renewables, which are of course a direct competitor to oil and gas", said Andrew Grant, a senior analyst at Carbon Tracker, a research organisation that warns investors about potential climate risks. The Ministry of Finance will ask Norges Bank to review the fund's climate risk, which could lead to it culling non eco-friendly companies. Reports suggested the decision to divest from upstream exploration companies would impact around $7.5bn of shares held in over 130 firms.

On Friday oil prices dropped more than three per cent amid a worsening economic outlook, as the European Central Bank (ECB) warned of continued weakness and new data reported that US job growth almost stalled in February.

"This shows that while the fund was initially built on revenue from oil and gas, the Ministry of Finance understands that the future belongs to those who transition away from fossil fuels", he said. "This assessment is thus independent of the government's current petroleum policy, which remains unchanged".

The Norwegian fund derives its income from the country's own oil and gas industry. "The state's revenues from the continental shelf are, as a general rule, a outcome of the profitability of exploration and production activities", it said. "Therefore this measure is about diversification". "It is a growth the fund should be able to take part in", Jensen said.

Pittsburgh Steelers trade Marcus Gilbert to Arizona Cardinals
After playing 14 games during his rookie season, Gilbert participated in just five contests in 2012 due to an ankle injury. Gilbert took to social media Friday morning to say his goodbyes to the organization after eight seasons in Pittsburgh.

Alia Bhatt, Sidharth Malhotra, Vidya Balan & more attend the Ambani wedding
Joining them was Vidya Balan who looked elegant as ever in a white Sari as she arrived with husband Sidharth Roy Kapur. The wedding ceremonies will kickstart anytime soon with baaraat assembling at Trident Hotel, BKC at 3.30 pm.

Unemployment rate in Northeast BC continued to rise in February
The goods-producing sectors added 9,500 new positions following job gains in natural resources, agriculture and manufacturing. Caranci said the Bank of Canada will likely view the February numbers "as a positive sign and a bit of a relief".

"Everything indicates that nearly the entire growth in listed infrastructure for renewable energy over the next 10 years will be driven by companies that do not have renewable energy as their main activity".

The government recommendation must still be approved by the country's parliament before going ahead. Also Swedish oil company Lundin is on the list.

"They have been reducing the curtailment volumes, so nothing has changed, and to me it seems to be on track and positive", McKay said.

Odd Arild Grefstad, CEO of Norwegian asset manager Storebrand Group, which has $90bn in assets under management, described the divestment decision as "reasonable and forward-looking".

The fund said the shift would affect 1.2% of its equity holdings.

However, as the FT notes, chances are environmentalists organizations will seize on the opportunity to step up pressure on other institutional investors in oil and gas to consider dialing back their exposure to the fossil fuel industry.

Like this: