March 11, 2019 Read More →

Norway’s investment decision puts oil and gas industry on notice

Financial Times ($):

Norway’s sovereign wealth fund may have spared the majors when announcing it was pulling investments from a host of oil and gas producers, but the move will still reverberate in the boardrooms of energy heavyweights like BP and ExxonMobil.

With $1tn under management, the Norwegian oil fund is the world’s biggest sovereign investor, owning equity stakes between 1 and 2.5 per cent in all the supermajors. On Friday it said it would divest from smaller exploration and production companies as a means of diversifying Norway’s oil-rich economy’s exposure to the commodity.

But while the largest integrated companies were granted a reprieve, justified by their vast refining and trading capabilities that could insulate them should the long-term future of oil demand growth threaten crude prices, Norway has also made clear it expects them to do more.

One official in Oslo was even more blunt: “If I were an oil major reading this decision, I would make sure my plan for investment in renewables was in order.”

It is a message that has been ringing around the boardrooms of Royal Dutch Shell, BP and Norway’s own state oil company Equinor for some time. But when it is delivered by the world’s largest investor in equities, it carries even greater weight.

More ($): Norway’s investment cull leaves oil majors spared but shaken


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