Oslo: Norway took a half step toward divesting oil and gas stocks in its massive $1 trillion wealth fund, approving the sale of pure exploration companies while sparing the biggest integrated producers.
“The objective is to reduce the vulnerability of our common wealth to a permanent oil price decline," finance minister Siv Jensen said in a statement. “Hence, it is more accurate to sell companies which explore and produce oil and gas, rather than selling a broadly diversified energy sector."
After a year of deliberation, the government on Friday approved the removal of 134 companies classified as exploration and production companies by FTSE Russell, while allowing the bigger integrated oil and gas companies to remain in the fund.
The proposal spares stocks such as Royal Dutch Shell Plc and Exxon Mobil Corp., but could include some of the larger shale producers.
The proposal, which rattled global markets when it was revealed back in 2017, was then hailed as a potential huge step by climate activists. It has also been a hot-button issue in Norway, which is seeking to project an image as a responsible environmental steward while pumping oil and gas at a fast clip.
In fact, the $1 trillion fund has been built up over the past two decades from oil and gas revenue and Norway also uses large chunks of income from its offshore fields each year to pay for its lavish welfare state.
The partial move underscores the changing political climate in Norway, where opposition to oil and gas exploration is on the rise. Prime Minister Erna Solberg’s Conservative Party has been a long-time friend to the oil industry.
Bloomberg's Kelly Gilblom and Annmarie Hordern contributed to this story.