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Government Pension Fund of Norway could stop investing in oil and gas assets. The central bank of Norway, Norges Bank, which runs the fund and its investments, says that investment in the energy sector is boosting the government’s exposure to crude oil prices, especially given the country’s majority shareholding in Statoil ASA. The bank adds that the vulnerability of state wealth to falling oil and gas prices will be reduced by the withdrawal of investment.

At present, the investments in the oil and gas sector account for around 6% of the Fund’s assets, just over 300 billion NOK (36.49 billion USD).

The oil and gas industry sub-index of the Stoxx Europe 600 regional index declined after announcing the news but managed to partially recover losses. Statoil shares fell by 1%.

The Fund also holds shares in most of the oil companies in the world, including 0.92% of Chevron Corp, 0.82% of Exxon Mobil Corp, 1.65% of BP PLC and 2.23% of Royal Dutch Shell PLC.

The proposal of the Norwegian central bank must be approved by the country’s finance ministry. The department reported in the meantime that the government is planning to take a decision in the autumn of 2018.

For two years of lower oil prices, the revenue of many of the world’s largest sovereign funds has declined significantly. In particular, it is the most fossil-dependent countries, such as Saudi Arabia and Kuwait.

The Norwegian Fund was created to manage the revenues of the country generated from the oil and gas. Its aim is to give the authorities room for maneuver in fiscal policy if oil prices fall, the economy shrinks and eventually if Norway’s stockpile runs out of raw materials.

In September, Fund assets reached 1 trillion USD against the strengthening of currencies against the dollar and strong stock markets.

Government Pension Fund of Norway has long withdrawn from its investments in mining and coal-fired power plants. Other large investors also set up funds that do not invest in fossil fuels, including Norway’s largest private pension fund, which has released two such instruments.

