Norway’s Wealth Fund recently made the decision to dump its oil and gas stocks, according to CNN. The biggest sovereign fund in the globe, it amounts to $1 trillion, thanks to its investments in oil. The trillion-dollar fund is slated to steadily remove its investment in petrochemicals including its stocks in Chesapeake Energy (CHK) and CNOOC in China (CEO). These ventures all pertain to exploring and producing energy.
Notably, the fund will remain invested in companies involved in renewable energy companies. Norwegian finance minister Siv Jensen says that this move aims to protect their commonwealth to the declines in oil prices. Jensen also revealed that Norway’s investment in energy adds up to $7.5 billion (66 billion Krone) which amounts to 1.2% of its holdings.
What Experts Say
In an analysis published in The Washington Post, Mark Gilbert from Bloomberg states that the move is a step in the right direction. This is in light of the necessity to address climate change, as well as the impending obsolescence of petrochemicals in favour of cleaner sources. According to Gilbert, whilst phasing out petrochemical investments is the right move, it is a ‘shame’ that the country did not fully eliminate all of its gas and oil ventures.
Meanwhile, reports say that energy is the largest contributor in Norway’s gross domestic product. Statoil (formerly called Equinor ASA) the country’s oil company, is shifting to renewable company ventures. As of late, the country plans to keep its shares in Statoil.