Sunset for Oil and Gas stocks? Norway cuts them from $1tn wealth fund
We don't usually cover this sort of news but this breaking news is a real big thing.
Norway’s $1tn sovereign fund will sell out of oil and gas shares, the country’s government has decided following recommendations from Norges Bank. This is a move that'll send shock waves through the energy sector.
The recommendation is that the world’s largest sovereign wealth fund, which owns about $37bn in energy shares, should sell out of companies that solely explore and produce oil and gas in a bid to reduce the risk to the Norwegian economy of a sustained fall in oil prices, according to the country’s finance minister. The exclusion will not impact integrated oil and gas companies such as BP and Shell.
The move, initiated by Norges Bank which manages the fund, is designed to make the Norwegian nation's wealth less exposed to a lasting drop in oil prices.Oil and gas stocks represented 5.9 percent of equity investments by the end of 2018, Reuters reported, citing fund data.