{"id":2641,"date":"2019-03-10T18:45:52","date_gmt":"2019-03-10T18:45:52","guid":{"rendered":"http:\/\/euromenaenergy.com\/?p=2641"},"modified":"2019-03-10T18:45:52","modified_gmt":"2019-03-10T18:45:52","slug":"norways-swf-to-sell-stakes-in-exploration-production-firms","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=2641","title":{"rendered":"Norway\u2019s SWF to sell stakes in exploration, production firms"},"content":{"rendered":"
\n

Reuters \/Oslo<\/p>\n<\/div>\n

Norway\u2019s trillion-dollar sovereign wealth fund, the world\u2019s biggest, will sell its stakes in oil and gas explorers and producers but still invest in energy firms that have refineries and other downstream activities, according to a government plan.
\nThe proposal announced yesterday said the fund\u2019s stakes in integrated companies, such as Royal Dutch Shell, ExxonMobil and other majors involved in everything from exploration to selling fuel at the roadside, would not be sold.
\nThe state, which has built its wealth on the back of North Sea oil and gas reserves, also has no plan to sell its direct stake in Norwegian energy firm Equinor or its direct holdings in Norwegian oil and gas fields.
\n\u201cThe government is proposing to exclude companies classified as exploration and production companies within the energy sector from the (fund) to reduce the aggregate oil price risk in the Norwegian economy,\u201d the Finance Ministry said in a statement.
\nEnergy stocks represented 5.9% of the fund\u2019s equity investments at the end of 2018, worth about $37bn, fund data showed.
\nBut much of that amount is invested in integrated firms rather than smaller, dedicated explorers and producers.
\nThe fund\u2019s shares in the 134 firms to be excluded have a value of about $8bn, the ministry said.
\nThe fund said the shift would affect 1.2% of its equity holdings.
\n\u201cExploration and production companies will be phased out from the fund gradually over time,\u201d the government proposal said, without giving a timeline for the divestment.
\nAmong the firms affected are Cairn Energy, in which the fund held 1.92% worth $22mn at the end of 2018, Tullow Oil, in which it held 2.1% worth $67mn, and Premier Oil, with 1.8% worth $12mn.
\nThose stocks would be replaced by investments in other sectors, broadly weighted in proportion under the fund\u2019s current mandate, the central bank\u2019s deputy governor said in 2017, when the bank made its initial proposal.
\nThe bank manages the fund.
\nAt the end of 2018, the fund\u2019s equity investments were split between the financial sector (23.7%), industrial companies (12.9%), technology (12.6%), consumer goods (11.9%), healthcare (11.4%), consumer services (10.8%), oil and gas (5.9%), basic materials (5.0%), telecoms (3.0%) and utilities (2.8%). The Finance Ministry said the list, based on the FTSE Russell classification, was not final.
\nFor instance, Cheniere, which does not produce oil or gas, but operates gas liquefaction facilities, was featured on the list.
\n\u201cIt will take time to divest from those companies and in the end it could be a different list,\u201d a ministry spokeswoman said.
\nParliament, which still needs to approve the proposal, is expected to back the plan as the ruling centre-right coalition has a majority in the assembly.
\nThe news added to pressure on energy companies, whose shares have already slipped due to declining oil prices.
\nThe proposal aims to make Norway\u2019s wealth less vulnerable to a permanent drop in the price of crude, now the fund has increased its exposure to equities to 70% of its value from 60%. The central bank originally suggested excluding all oil and gas companies, including integrated firms.
\nBut the government adjusted the proposal, saying major firms had the scale to shift to renewable energy.
\n\u201cTo exclude all oil companies would limit the fund\u2019s opportunities,\u201d Finance Minister Siv Jensen said.
\nThe decision to keep stakes in integrated firms drew criticism from those who want Norway to shift more decisively away from fossil fuel investments.
\nSony Kapoor, managing director of the think tank Redefine, said diluting the central bank\u2019s plan \u201crepresents a victory of Big Oil lobbying over financial prudence and common sense\u201d. Greenpeace campaigner Martin Norman said the government\u2019s decision \u201cdoes not address Norway\u2019s exposure to oil and we are not showing the world the way forward\u201d. The opposition Labour Party said it would back the government, even though it argued for a tougher strategy.
\n\u201cIt\u2019s not enough, but we should do this now and then we might see (what to do) in the future,\u201d said Svein Roald Hansen, Labour\u2019s finance spokesman, adding that the state was right to keep its stakes in Equinor and oilfields.
\nThe fund invests Norway\u2019s revenues from oil and gas production for future generations in stocks, bonds and real estate abroad.
\nIts investments in integrated firms at the end of 2018 included stakes of 2.45% in Shell, 2.31% in BP, 2.02% in Total, 0.99% in Chevron and 0.94% in ExxonMobil.<\/p>\n","protected":false},"excerpt":{"rendered":"

Reuters \/Oslo Norway\u2019s trillion-dollar sovereign wealth fund, the world\u2019s biggest, will sell its stakes in oil and gas explorers and producers but still invest in energy firms that have refineries and other…<\/p>\n","protected":false},"author":1,"featured_media":2662,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[46,48,57,90,96,107,113,137,139,160,174,183,184,201,202,209,230,232,233,244,246,249,256,267,277,279,288],"class_list":["post-2641","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-aramco","tag-athens","tag-baroudi","tag-democracy","tag-doha","tag-embargo","tag-energy-peace","tag-gas","tag-gazprom","tag-international-maritime-disputes","tag-lebanon","tag-maritime-boundaries-east-mediterranean","tag-maritime-disputes","tag-offshore","tag-oil","tag-opec","tag-poverty-alleviation","tag-putin","tag-qatar","tag-rosneft","tag-roudi","tag-russia","tag-saudi","tag-straddling-hydrocarbons-reserves","tag-total","tag-trump","tag-usa"],"_links":{"self":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/2641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2641"}],"version-history":[{"count":0,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/2641\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/media\/2662"}],"wp:attachment":[{"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}