March 13, 2019 Read More →

Experts say Norwegian pension investment decision could affect India’s oil and gas sector


The decision of the world’s largest sovereign wealth fund to stop investing in oil and gas explorers globally may affect Indian companies, such as Reliance Industries Ltd, Oil and Natural Gas Corp. Ltd, Indian Oil Corp. Ltd (IOC) and Oil India Ltd, where the $1 trillion fund has made investments.

The decision of Norway’s Government Pension Fund Global (GPFG) comes against the backdrop of uncertainty in global oil markets and concerns about climate change that have led several countries to harden their focus on renewable energy.

GPFG, which earlier stopped investing in coal projects, has made 253 investments in Indian equities so far totalling $7.39 billion. Of this, it has invested a total of $658 million in RIL ($485.19 million), ONGC ($108.74 million), Indian Oil ($61.6 million) and Oil India ($2.03 million). GPFG owns stakes of less than 1% in each of the four companies.

To be sure, GPFG will remain invested in integrated global oil majors, while Indian E&P companies do not foresee a major impact on their market value given the marginal holdings of GPFG.

Experts say multilateral and bilateral agencies as well as sovereign wealth funds have been ceasing investments in businesses that contribute to climate change.

“This decision is likely to stimulate greater debate in the investment community about the viability of fossil fuel stocks. It should also encourage investors to direct fund managers to produce portfolios with less fossil fuel exposure,” said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, in an emailed statement.

More: Norway fund’s green shift may unsettle Reliance, ONGC, Indian Oil, Oil India


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