No. 7 & 7A,
Jalan Tiara, Tiara Square,
Taman Perindustrian Sime UEP,
47600 Subang Jaya,
Selangor, Malaysia.
+603-8023 9829
+603-8023 7089
Fictron Industrial Supplies Sdn Bhd
No. 7 & 7A,
Jalan Tiara, Tiara Square,
Taman Perindustrian Sime UEP,
47600 Subang Jaya,
Selangor, Malaysia.
No. 7 & 7A,
Jalan Tiara, Tiara Square,
Taman Perindustrian Sime UEP,
47600 Subang Jaya,
Selangor, Malaysia.
Fictron Industrial
Automation Pte Ltd
140 Paya Lebar Road, #03-01,
AZ @ Paya Lebar 409015,
Singapore.
+65 31388976
sg.sales@fictron.com
Automation Pte Ltd
140 Paya Lebar Road, #03-01,
AZ @ Paya Lebar 409015,
Singapore.
+65 31388976
sg.sales@fictron.com
Norway's $1 Trillion Fund to Dump Oil and Gas Shares
11 Mar 2019
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Norway's $1 trillion wealth fund, the greatest of its kind in the world, will begin dropping shares in oil and gas companies, but stopped short of barring major producers like ExxonMobil and Chevron.
The move was hailed by environmental activists as a sign that the global economy is increasingly moving away from fossil fuels toward cleaner energy.
The financial impact, however, may be fairly limited. The move will focus on companies that trade exclusively in exploration and production rather than the integrated oil giants, which do everything from searching for fossil fuels to selling them to consumers.
The fund is looking to sell some $7.5 billion in shares in 134 energy companies over time.
The Norwegian government said its motivation was not climate activism but financial. The fund, somewhat ironically, derives its income from Norway's booming oil and gas industry. So reinvesting those proceeds in other sectors is considered a way to keep the money safe should oil and gas prices fall.
'The objective is to reduce the aggregate oil price risk on the whole Norwegian economy,' Minister of Finance Siv Jensen told The Associated Press. 'The Norwegian state is highly exposed to oil.'
Tax statements from oil production have made Norway rich. They underpin generous welfare provisions. And a hefty proportion is siphoned off into the fund, which was planned as a pension kitty for the country's 5.3 million inhabitants.
In Stavanger, a city on the rainy west coast where many oil companies are based, the sight of $100,000 Teslas cruising along fjord-side roads are a marker of the town's oil-sponsored private wealth.
Mark Campanale, executive director of the Carbon Tracker Initiative, a think tank on climate issues, says Friday's decision is more significant than when the fund sold off its shares in coal companies.
'This shows that while the fund was first built on revenue from oil and gas, the Ministry of Finance knows that the future belongs to those who change away from fossil fuels,' he said. 'Now is the time for smart investors around the world to follow their lead and make decisions driven by the reality of the energy transition.'
Jensen said she had advised Norway's central bank to supervise how the fund was exposed to companies that could contribute to climate change, which is now assumed a major risk for financial returns. However, it was too early to say how that evaluation might impact investment choices.
Integrated oil giants were not restricted from the fund's investments in part because those companies are thought about most likely to invest in green energy - a market the Norwegian government is keen to profit from.
'They take on much bigger investments than renewable companies do. It would be a mistake as I see it to cut off the fund's possibility to invest in them,' Jensen said.
Major added oil companies will be breathing a sigh of relief, as the Norwegian fund owns large amounts of their shares. At the end of 2018, it owned shares in around 300 oil producers and service companies including almost $6 billion in Royal Dutch Shell, or 2.5 percent of the company. It owns 2.3 percent of London-based BP.
Rather, smaller companies like Marathon Oil and Chesapeake Energy will see their stock sold. Their shares were down 2.5 percent and 2 percent in premarket trading in the U.S.
The Norwegian fund has a stake in more than 9,000 companies worldwide, including the likes of Apple, Nestle, Microsoft and Samsung. On average, the fund holds 1.4 percent of all of the world's listed companies. About 70 percent of its holdings are in shares.
This article is originally posted on Tronserve.com
The move was hailed by environmental activists as a sign that the global economy is increasingly moving away from fossil fuels toward cleaner energy.
The financial impact, however, may be fairly limited. The move will focus on companies that trade exclusively in exploration and production rather than the integrated oil giants, which do everything from searching for fossil fuels to selling them to consumers.
The fund is looking to sell some $7.5 billion in shares in 134 energy companies over time.
The Norwegian government said its motivation was not climate activism but financial. The fund, somewhat ironically, derives its income from Norway's booming oil and gas industry. So reinvesting those proceeds in other sectors is considered a way to keep the money safe should oil and gas prices fall.
'The objective is to reduce the aggregate oil price risk on the whole Norwegian economy,' Minister of Finance Siv Jensen told The Associated Press. 'The Norwegian state is highly exposed to oil.'
Tax statements from oil production have made Norway rich. They underpin generous welfare provisions. And a hefty proportion is siphoned off into the fund, which was planned as a pension kitty for the country's 5.3 million inhabitants.
In Stavanger, a city on the rainy west coast where many oil companies are based, the sight of $100,000 Teslas cruising along fjord-side roads are a marker of the town's oil-sponsored private wealth.
Mark Campanale, executive director of the Carbon Tracker Initiative, a think tank on climate issues, says Friday's decision is more significant than when the fund sold off its shares in coal companies.
'This shows that while the fund was first built on revenue from oil and gas, the Ministry of Finance knows that the future belongs to those who change away from fossil fuels,' he said. 'Now is the time for smart investors around the world to follow their lead and make decisions driven by the reality of the energy transition.'
Jensen said she had advised Norway's central bank to supervise how the fund was exposed to companies that could contribute to climate change, which is now assumed a major risk for financial returns. However, it was too early to say how that evaluation might impact investment choices.
Integrated oil giants were not restricted from the fund's investments in part because those companies are thought about most likely to invest in green energy - a market the Norwegian government is keen to profit from.
'They take on much bigger investments than renewable companies do. It would be a mistake as I see it to cut off the fund's possibility to invest in them,' Jensen said.
Major added oil companies will be breathing a sigh of relief, as the Norwegian fund owns large amounts of their shares. At the end of 2018, it owned shares in around 300 oil producers and service companies including almost $6 billion in Royal Dutch Shell, or 2.5 percent of the company. It owns 2.3 percent of London-based BP.
Rather, smaller companies like Marathon Oil and Chesapeake Energy will see their stock sold. Their shares were down 2.5 percent and 2 percent in premarket trading in the U.S.
The Norwegian fund has a stake in more than 9,000 companies worldwide, including the likes of Apple, Nestle, Microsoft and Samsung. On average, the fund holds 1.4 percent of all of the world's listed companies. About 70 percent of its holdings are in shares.
This article is originally posted on Tronserve.com