Norway’s trillion dollar sovereign wealth fund is starting the world’s biggest divestment in oil and gas.
The fund prepares to sell stocks in oil and gas exploration companies, in a move that is the biggest divestment from hydrocarbons yet, according to New Scientist.
The Government Pension Fund Global, widely known as oil fund, will phase out $8 billion held in 134 firms to reduce the fund’s risk from volatile oil prices, said finance ministry Siv Jensen.
But, the withdrawal won’t apply to Shell, BP and Total, the three biggest investments in the fund’s total £27.9bn of oil and gas stocks, because they aren’t solely oil production companies.
The finance ministry also made it clear that the decision wouldn’t affect the Norway’s state oil firm, Equinor, formerly known as Statoil.
The central bank that manages the fund recommended two years ago that it ditch oil and gas to reduce its exposure to a collapse in the oil price.
Exploration and production companies will be phased out from the fund gradually in the long term.