OSLO, March 8 ― Norway’s trillion-dollar sovereign wealth fund, the world’s largest, will drop oil and gas companies from its benchmark index and investment universe, the finance ministry said today, extending losses of energy stocks worldwide.
Oil and gas stocks represented 5.9 per cent of equity investments at end-2018, corresponding to about US$37 billion (RM151.3 billion), according to fund data.
“The 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,” the finance ministry said in a statement.
The aim of the proposal, initiated by the central bank which manages the fund, is to make the Norwegian government’s wealth less vulnerable to a permanent drop in oil prices, now that the fund has increased its exposure to equities to 70 per cent of the fund’s value from 60 per cent earlier.
The fund invests Norway’s revenues from oil and gas production for future generations in stocks, bonds and real estate abroad.
It is a major investor in oil firms, holding stakes at end-2018 of 2.45 per cent in Shell, 2.31 per cent in BP, 2.02 per cent in Total, 0.99 per cent in Chevron and 0.94 per cent in ExxonMobil. ― Reuters