Will Norways sovereign wealth fund divest its oil holdings? Decision today

Andrew Cummings
March 10, 2019

The oil & gas sector was shaken on Friday after the world's largest sovereign wealth fund, the Government Pension Fund of Norway (GPFN), chose to divest from the sector.

350.org includes Norway's sovereign wealth fund on its divestment list, but the country is not divesting from fossil fuels as McKibben claimed.

Norway's US$1-trillion wealth fund, the biggest of its kind in the world, will begin dumping shares in oil and gas companies including some Canadian names, but stopped short of barring major producers like Suncor, ExxonMobil and Chevron.

It'll still invest in large, integrated oil companies like BP and Exxon Mobil. Articles appear on euronews.com for a limited time.

Minister Jensen now confirms that the Norwegian Government Pension Fund Global, also called the Oil Fund, will sell its shares in the upstream industry.

"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.

"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.

After more than a year of deliberation, the government on Friday approved excluding 150 companies that are held by the fund and classified as exploration and production companies by FTSE Russell.

Greenpeace campaigner Martin Norman said the government's decision 'does not address Norway's exposure to oil and we are not showing the world the way forward.

Rather, smaller companies like Marathon Oil and Chesapeake Energy will see their stock sold.

The advice follows a report from Norway's central bank in 2017 that dropping oil and gas investment would be a good economic move. "However, it does send a clear signal that companies betting on the expansion of their oil and gas businesses present an unacceptable risk, not only to the climate but also to investors".

However, environmental organizations in the country want the Finance Ministry to proceed and take new steps that ultimately will result in a full exit from companies engaged in oil and gas. Finance Minister Siv Jensen is expected to present the government's position at a press conference at 12:15 pm (1115 GMT). It has been a hot-button issue in Norway, which is seeking to project an image as a responsible environmental steward while pumping oil and gas at a fast clip.

The ministry's decision which was earlier backed by the country's central bank, is still not the final word.

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