Norway wealth fund to cut oil and gas investment

Norwegian $1tn wealth fund announced on Friday it would dump its investments in oil and gas exploration firms but will still own stakes in firms such as BP and Shell that have renewable energy divisions.

The fund that is the largest in the world was created to invest in North Sea oil businesses. It currently owns around $37bn of shares in oil companies such as BP, Shell and Total.

The shift in strategy of the Norwegian Government Pension Fund Global (GPFG) will affect 1.2% of its equity holdings, worth about £5.7bn.

"The oil industry will be an important and major industry in Norway for many years to come," it said in a statement.

"A permanent reduction in the oil price will have long-term implications for public finances,” it added.

The decision is motivated by a desire to protect the Norwegian economy. “The objective is to reduce the vulnerability of our common wealth to a permanent oil price decline,” said Norway’s finance minister, Siv Jensen.

“Hence, it is more accurate to sell companies which explore and produce oil and gas, rather than selling a broadly diversified energy sector.”