Norway sovereign wealth fund to dump oil and gas

Image Shutterstock

Environmental activists are spinning this as a victory in their war against fossil fuels.

But the divestment will focus on companies which trade exclusively in exploration and production like Marathon and Chesapeake Energy rather than the integrated oil giants.

Integrated stocks, like Royal Dutch Shell (RDS.A), will not be sold.

The fund owns shares in Canadian companies such as Canadian Natural Resources Ltd., Cenovus Energy Inc., Encana Corp. and several small- to medium-size producers. BP PLC and Canada's Suncor Energy Inc. "This assessment is thus independent of the government's current petroleum policy, which remains unchanged", the government said.

'It will take time to divest from those companies and in the end it could be a different list, a ministry spokeswoman said.

The proposal was first revealed two years ago when Norges Bank, the country's central bank which manages the fund, advised the Government to exclude the oil and gas sector from the benchmark index for the fund.

This is fairly sensible and obvious if you think about it, Norway instead of immediately spending all its vast income from its oil and gas production and living high on the hog, has been eminently sensible and invested a significant part of it for future generations. So reinvesting those proceeds in other sectors is considered a way to keep the money safe should oil and gas prices fall.

"The objective is to reduce the vulnerability of our common wealth to a permanent oil price decline", the Finance Ministry said, announcing the decision on Friday.

More news: Americans among 157 killed in Ethiopian plane crash

Tax receipts from oil production have made Norway rich.

The decision "does not reflect any specific view on the oil price, future profitability or sustainability of the petroleum sector".

"The decision should be seen as a red flag for private banks and investors whose oil and gas stocks are becoming increasingly high-risk and morally untenable", he said in a statement.

The selloff of stakes in the Canadian companies is not expected to have a great impact on the market which is already buffeted by issues related to pipeline export capacity and a shortage of capital, said analyst Phil Skolnick of Eight Capital. The fund will eventually sell its investments in 150 oil exploration and production companies, which amounts to only 1.2 percent of its holdings.

The review suggests the fund could become more proactive in engaging with those oil and gas giants that are pivoting investments towards renewables and other low-carbon activities.

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

It'll still invest in large, integrated oil companies like BP and Exxon Mobil. It owns 2.3 per cent of London-based BP. U.S. West Texas Intermediate crude futures were down $1.85, or 3.4 percent, at $54.82.

The fund is the biggest of its kind in the world, holding more than 9,000 stocks across 73 countries.

Related News:

Most liked

Dark Souls creator would 'love to' make a battle royale game
Despite having instant fame, the legendary King's Field developer must go from contract to contract to stay afloat. We definitely have an interest, so this possibility exists.

The Sinking City Gets New Release Date for Good Reason
June is less crowded, so Frogwares believes it's a flawless time to put The Sinking City out to fans. An oppressive atmosphere and story inspired by the universe of H.P.

Brexit in peril if PM May's deal is rejected: foreign minister Hunt
The pair said that unless the Prime Minister secured changes to the deal, it would be "defeated firmly" again on Tuesday. After she spoke, Barnier announced he was ready to give Britain the unilateral right to leave the EU customs union.

Full-Time Jobs Surge in February
Perhaps most encouraging was the second monthly acceleration of wages, which outpaced inflation for the first time in six months. Last week, Canada's statistics agency reported the nation's economy grew by just 0.1 percent in the final three months of 2018.

Porsche collects loads of four-figure deposits for Taycan EV
The first purely electrically powered sports vehicle from Porsche , the Taycan , is enjoying significant attention worldwide. In addition, talking about a possible setting for electric cars, less powerful, and hence more available power plants.

Algeria's Bouteflika warns against 'chaos' ahead of protests
State news agency APS reported that protesters were demanding "regime change" as demonstrations grew Friday afternoon. Many who demonstrated on Friday initially gathered at university sites before heading onto the streets.

Financing Deals Put Tesla Closer to Making Model 3s in China
Local manufacturing also will help the company sidestep any re-escalation of trade tensions between the United States and China. Guests look at a Tesla Model 3 during a ground-breaking ceremony for a Tesla factory in Shanghai on January 7, 2019.

Liz Cheney: Democratic Party Is ‘Now Enabling and Abiding By Anti-Semitism’
"Now, she may be anti-Semitic, but if I criticize Saudi Arabia, that doesn't mean I'm Islamophobe". Democrats argued with one another last Wednesday over the resolution's language.

Ingram expected to miss remainder of season
The Lakers have gone 5-13 since Ball went down, having the worst defense in the National Basketball Association in that time. Lonzo had his left ankle re-evaluated by doctors on Saturday, and the two sides agreed to shut Ball down for the season.

The Bank of Canada March 2019 rate statement
The Canadian dollar swooned on the news, falling almost half a cent minutes following the bank's announcement. The bank predicted inflation to stay slightly below its ideal two per cent target through most of the year.

Patient "Free" Of HIV After Stem Cell Treatment
Two men known collectively to the media as the Boston Patients appeared to be "cured" of HIV following bone marrow transplants. He had received bone marrow from a donor with a mutated gene for the CCR5 protein, which is found on white blood cells.

Pakistan wants ICC action against India for wearing army caps
Even worse is Ambati Rayudu's performance at No 4 with an aggregate of 33 runs in three games. The return to form of their skipper, Aaron Finch, would give Australia a huge sigh of relief.

Boy Who Wasn't Immunized For Tetanus Spent 57 Days In Oregon Hospital
On day 44, he was finally removed from his ventilator and was able to sip clear liquids. The disease can cause death or severe disability in those who survive, Schaffner said.

Rams sign Weddle to 2-year deal worth reported $10.5M
The Rams are getting a proven veteran in Weddle, whose 29-career interceptions rank No. 9 among all active players. He was drafted No. 37 overall by the now-crosstown Chargers, where he played nine seasons in Southern California.

U.S. envoy in China casts doubt on trade deal
In the absence of a trade deal, Trump has threatened to impose additional tariffs on import of Chinese products into the US. He declined to say whether Trump would set a new tariff deadline should the talks stall.