The world’s largest sovereign wealth fund shocked the world when it said it was dumping oil and gas stocks, but it seems to have had a change of heart.

The initial proposal of the fund—which has amassed its vast wealth from none other than Norway’s oil and gas revenues and is therefore commonly referred to as ‘the oil fund’--was to dump all oil stocks from its portfolio, including significant stakes in Big Oil worth billions of US dollars each.

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Nearly two years later, after compromises and subsector changes in the index provider FTSE Russell that Norway uses as a reference, the initial proposal of dumping more than US$35 billion of oil stocks has been now narrowed down to stakes in purely exploration and production companies worth a total of less than US$6 billion—and also worth less than the fund’s stake in Shell alone.

Norwegian economists tell Bloomberg that the heavily reduced (not final yet) list of oil stocks for sale will likely have a very small effect and is reduced to a “symbolic” divestment, while Greenpeace’s finance campaign director for the Nordics, Martin Norman, described to Bloomberg the whittled-down proposal as “completely scandalous.”

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The initial proposal shocked the markets as investors started questioning whether other major funds would follow suit and opt out of fossil fuels at a time when shareholders, investors, and environmentalists are increasingly pressing major oil companies to start taking climate change seriously and to prepare their business portfolios for a world of peak oil demand, whenever that may come.

After months of deliberations, Norway’s government proposed in March 2019 that the fund divest from 134 companies classified by the index provider FTSE Russell as belonging to the exploration and production subsector.

As at the end of 2018, the Norwegian fund held stakes in E&P companies—under FTSE Russell’s classification for such—with an approximate value of US$7.8 billion (66 billion Norwegian crowns).

To compare, as of the end of 2018, the fund’s total equity holdings in oil and gas firms had a value of US$37 billion, spread in investments in 341 companies, including just below 1 percent in each of Exxon and Chevron, 2.45 percent in Shell, 2 percent in Total, 2.31 percent in BP, and 1.59 percent in Eni. The stake in Shell alone was worth US$5.9 billion.

Now almost two years after the initial proposal, Norway is close to making the final decision on which companies it will dump from its sovereign wealth fund, but along the way, it has whittled the initial list down to a much smaller list of pure exploration and production companies, sparing all major integrated oil firms from divestment. A change in the categories of the FTSE Russell index provider as of July 1, 2019, further drops some of the oil companies from the ‘exploration and production’ category and moves them to ‘refining and marketing’, leaving the new category ‘crude producers’ as the companies Norway will likely target to divest.

According to Bloomberg calculations, the Norwegian fund held shares in the ‘crude producers’ category worth US$5.7 billion as of end-2018—less than the fund’s US$5.9-billion stake in Shell alone.

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As per the ‘crude producers’ category in FTSE Russell, the fund may divest stakes in a number of US oil producers, including Anadarko, Apache Corp, Chesapeake Energy, Concho Resources, Continental Resources, Devon Energy, Diamondback Energy, EOG Resources, Marathon Oil Corp, Murphy Oil, Occidental Petroleum, Pioneer Natural Resources—to name just a few of the drillers in the US shale patch. As a whole, the ‘crude producers’ list is heavy on US shale firms, Canadian oil producers with major oil sands operations, and companies exploring for oil in Africa.

While Norway’s currently planned divestment will likely have a negligible effect on global oil stock indexes, it will have an effect on those US oil firms that will end up on the final list of stake sales.

While the overall effect of the world’s largest fund ditching oil stocks is likely to be insignificant for stock markets, it could be a significant step toward institutional investors increasingly reviewing their participation in the fossil fuel sector, as calls for divesting from oil and gas are set to only grow louder.

This article was originally published on Oilprice.com