Norway’s enormous $1 trillion sovereign wealth fund decides to sell oil and gas stocks worth $5.9 billion. The decision is a moderate divestment action as an answer to a radical initial proposal to dump all its oil investments in two years.
The fund, widely known as oil fund, had already asked the government for permission in 2017 to sell about $40 billion in such stocks, to reduce the overall risk for Norway, one of the world’s biggest oil producer.
The final decision from the Finance Ministry released on Tuesday evening outlines a gradual divestment instead.
The divestment plan includes companies classified as crude oil producers.
Moreover the fund’s investments in such companies and funds will continuously be blocked from now on.
Environment Minister Ola Elvestuen called the decision as the most important climate decision the coalition has agreed on.
About the fund
The Government Pension Fund Global was set up in 1990 to underpin long-term considerations when phasing petroleum revenues into the Norwegian economy.
The aim of the oil fund is to ensure responsible and long-term management of revenue from Norway’s oil and gas resources in the North Sea so that this wealth benefits both current and future generations. The fund’s formal name is the Government Pension Fund Global.
Norges Bank Investment Management manages the fund on behalf of the Ministry of Finance, which owns the fund on behalf of the Norwegian people. The ministry determines the fund’s investment strategy, following advice from among others Norges Bank Investment Management and discussions in Parliament. The management mandate defines the investment universe and the fund’s strategic reference index.
The Ministry of Finance has on a regular basis transferred capital to the fund from the Norwegian state’s petroleum revenues. The fund’s capital is invested abroad, to avoid overheating the Norwegian economy and to shield it from the effects of oil price fluctuations. The fund invests in international equity and fixed-income markets and real estate. The fund is invested in most markets, countries and currencies to achieve broad exposure to global economic growth.