Norway's Government Pension Fund Global, which manages assets of $1 trillion, has decided to reduce its investment in shares of oil and gas companies.
First of all, it will affect the business, which is focused on exploration and production, but will not affect the largest integrated oil and gas concerns, such as Shell, BP or ExxonMobil.
It is expected that almost all the growth of listed companies on renewable energy over the next decade will be provided by companies for which renewable energy is not the main business. The fund should be able to participate in this growth, Norwegian Finance Minister Siv Jensen believes.
This fund’s step has to decrease Norwegian dependence on the industry, which is the largest oil producer in Western Europe. Many experts predict that global oil demand will reach a high level by the 2030s, while the climate goal is increasing its efforts to reduce dependence on fossil fuels.
The fund’s stock portfolio is $623 billion, of which oil and gas companies are $37 billion. The fund may sell securities of companies such as Chesapeake, Cairn Energy, Tullow Oil, and Russian Novatek and Bashneft for $7.5 billion.
Parliament has to approve the fund’s step. The refusal of Norway, a major exporter of oil and gas, from investments in the oil and gas business looks rather strange. But the reasons for this are climate problems, the rapid development of renewable energy sources and the development of electric transport.
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