The Norwegian government said on Friday its $1 trillion asset manager- the world's biggest sovereign fund - will sell its stake in oil and gas explorers and producers but will continue to invest in energy companies that have refineries and are engaged in distribution and retail sales of oil and gas products.
This is fairly sensible and obvious if you think about it, Norway instead of immediately spending all its vast income from its oil and gas production and living high on the hog, has been eminently sensible and invested a significant part of it for future generations.
Its 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. Articles appear on euronews.com for a limited time.
The revenue from state-owned oil and gas companies is placed in the Government Pension Fund Global - as it is officially known - which Oslo then taps to balance its budget.
The decision "does not reflect any specific view on the oil price, future profitability or sustainability of the petroleum 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.
Those stocks would be replaced by investments in other sectors, broadly weighted in proportion under the fund's current mandate, the central bank's deputy governor said in 2017, when the bank made its initial proposal.
"The oil industry will be an important and major industry in Norway for many years to come", the statement read. Also Swedish oil company Lundin is on the list.
Rather, smaller companies like Marathon Oil and Chesapeake Energy will see their stock sold. While the move has been celebrated as a big win by environmentalists, its motivations have more to do with economics than climate change.
Jensen said she had instructed Norway's central bank to monitor how the fund was exposed to companies that could contribute to climate change, which is now considered a major risk for financial returns.
However, environmental organizations in the country want the Finance Ministry to proceed and take new steps that ultimately will result in a full exit from companies engaged in oil and gas. The Norwegian government indicated in its release that it expects most of the future growth in renewable energy to come from companies that do not now have renewable energy as their main business.
Faced with rising opposition to oil and gas exploration, the Norwegian government is keen to "project an image as a responsible environmental steward while pumping oil and gas at a fast clip", Bloomberg wrote.