Norway wealth fund to drop oil, gas stocks

By Gwladys Fouche and Terje Solsvik

OSLO (Reuters) – Norway’s trillion-dollar sovereign wealth fund, the world’s largest, will drop oil and gas companies from its benchmark index and investment universe, the finance ministry said on Friday, extending losses of energy stocks worldwide.

Oil and gas stocks represented 5.9 percent of equity investments at end-2018, corresponding to about $37 billion, according to fund data.

“The Government is proposing to exclude companies classified as exploration and production companies within the energy sector from the (fund) to reduce the aggregate oil price risk in the Norwegian economy,” the finance ministry said in a statement.

The aim of the proposal, initiated by the central bank which manages the fund, is to make the Norwegian government’s wealth less vulnerable to a permanent drop in oil prices, now that the fund has increased its exposure to equities to 70 percent of the fund’s value from 60 percent earlier.

The fund invests Norway’s revenues from oil and gas production for future generations in stocks, bonds and real estate abroad.

It is a major investor in oil firms, holding stakes at end-2018 of 2.45 percent in Shell (LON:), 2.31 percent in BP (LON:), 2.02 percent in Total, 0.99 percent in Chevron (NYSE:) and 0.94 percent in ExxonMobil (NYSE:).

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