OSLO: Norway's sovereign wealth fund, the world's biggest and which is fuelled by petrodollars, will divest its oil and gas holdings to reduce its exposure to the oil sector, the Norwegian government announced on Friday .
While the decision is based solely on financial considerations and not on the environment or climate change, a divestment by an investor worth more than US$1 trillion will undoubtedly be seen as a major blow to polluting fossil fuels.The government of Norway, the biggest hydrocarbon producer in western Europe, said it would exclude companies classified as exploration and production companies from the fund.
"The objective is to reduce the vulnerability of our common wealth to a permanent oil price decline," Finance Minister Siv Jensen said in a statement.Oil and gas represent almost half of exports of Norway's and 20 per cent of the state's revenues.
At the end of 2018, the fund had holdings worth around US$37 billion in the oil sector, with significant stakes in Shell, BP, Total and ExxonMobil among others. The decision"does not reflect any specific view on the oil price, future profitability or sustainability of the petroleum sector. This assessment is thus independent of the government's current petroleum policy, which remains unchanged," the government said.