It is about lowering the risks, says Finance Minister Siv Jensen. But the decision to kick out oil exploration and production companies from the country’s pension fund could be seen as a first move towards a bigger exit from the energy sector.
Minister Jensen now confirms that the Norwegian Government Pension Fund Global, also called the Oil Fund, will sell its shares in the upstream industry.
The Fund that is the world’s biggest sovereign wealth fund with more than €900 billion in assets will now get rid of stakes in more than 160 companies from all over the world. The stocks today comprises 66 billion kroners (€6.7 billion) of value, or 1.2 percent of the total portfolio of the Fund, the Ministry informs.
On list are several powerful Russian companies, among them Novatek and Bashneft. Also Swedish oil company Lundin is on the list. The company shares will not be sold immediately, but over time, the ministry makes clear.
“It is about lowering the risks,” the finance minister underlined in a press conference on Friday. She also highlighted that the decision is based on financial consideration and not climate considerations.
“The most important thing we can do to prepare for a possible drop in the oil price is to conduct an economic policy that facilitates transformation in all parts of the economy and lowers the significance of such shocks,” Jensen said.
Not a policy change
She also underlined that there will be no change in the country’s bigger policy on oil and natural gas.
“Let me make it absolutely clear: this has nothing to do with the government’ petroleum policy. That remains unchanged.”
It is the Norges Bank Investment Management (NBIM), a part of the Norwegian Central Bank, that manages the Oil Fund on behalf of the country’s Ministry of Finance.
The NBIM originally recommended the Finance Ministry to exit the whole energy sector. But Jensen chose a softer approach.
“We believe it would be wrong to take out the whole energy sector,” she underlines.
A first of many steps, environmentalists hope
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.
“We cheer for this decision and the government deserves tribute,” says Gaute Eiterjord, leader of Nature and Youth. “Our pension money must no longer be invested in oil and gas that destroys our future,” he underlines in a comment.
The environmentalists now call on the government to follow up with a full pullout of petroleum by the Pension Fund.
The Fund today has a small stake in more than 9,000 companies worldwide, including the likes of Apple, Nestlé, Microsoft and Samsung. On average, the fund holds 1.4 percent of all of the world’s listed companies. It is one of the world’s largest funds, with investments spread across most markets and 73 countries.
The Fund was established in 1996, almost 30 years after Norway made its first discovery of oil in the North Sea.
Related stories from around the North:
Norway: Norway ramps up oil and gas production in Arctic despite looming climate crisis, The Independent Barents Observer
Russia: Russia’s Rosneft considering pipeline to boost shipping on Northern Sea Route, The Independent Barents Observer
United States: Drilling opponents in U.S. House launch bill to close ANWR, Alaska Public Media