The world’s largest sovereign wealth fund may turn its back on the oil and gas investments in and attempt to cut its exposure to what it thinks may be a permanent decline in commodity prices.

The Norge Bank was set up to manage the profits that Norway made from its huge oil resources. However, it has now made a recommendation to the government that it should call time on investments in global oil and gas companies totalling almost £28bn .

In a letter to Norway’s ministry of finance the bank said its planned oil purge “will make the government’s wealth less vulnerable to a permanent drop in oil and gas prices”.

The Norges fund said it represents a far bigger proportion of the country’s overall wealth than in the past. It is worried that its holdings in the state oil company Statoil combined with investments in global oil companies means it is twice as exposed to the oil industry as a typical broad equity index.

“This exposure is increased several-fold when the government’s future oil and gas revenues are also taken into account,” the bank said.

Oil prices of over $100 a barrel were typical before the price crash in late 2014 resulted in oil falling to twelve year lows of $27.50 in early 2016. Since then the price has recovered to above $60 a barrel but oil companies have warned that they are preparing for a future of low prices as other energy sources gain traction.