OLSO: Owning shares in integrated oil companies is much more than buying a barrel of oil, so the proposal of Norway’s US$-1-trillion wealth fund to ditch oil stocks because of increased risk to exposure to oil prices is a “bad argument”, Patrick Pouyanne, the chief executive of one of those integrated companies, Total, told Bloomberg in an interview on Friday.
In a shock announcement in November last year, Norway’s wealth fund recommended the removal of oil and gas stocks—more than US$35 billion worth of shares from the fund’s equity benchmark index to make Norway’s wealth and economy less vulnerable to a permanent drop in oil and gas prices. Norway’s wealth fund has 379 investments in oil and gas equities, including stakes in the top global firms. The fund owns 1.62 percent of Total, worth more than US$2 billion.
