Norway's Wealth Fund Drops Indian Oil Firm ONGC From Portfolio

The world's largest sovereign wealth fund, Norway's $1.4 trillion Government Pension Fund Global (GPFG), is excluding India state firm Oil and Natural Gas Corporation Limited (ONGC) from its portfolio due to the company's ties to groups that seriously violate human rights in South Sudan.

Norges Bank, which manages the so-called oil fund that has amassed its wealth from Norway's oil and gas, has decided to exclude four companies from the fund, including the Indian state-owned ONGC, Norges Bank said in a statement.

The Council on Ethics has recommended to Norges Bank to exclude ONGC "due to an unacceptable risk that the company is contributing to serious violations of the rights of individuals in situations of war or conflict."

"Control of the petroleum resources in the country has been a key driver in the conflict. In this context, ONGC participates in two joint ventures with, among others, the South Sudan's state oil company Nilepet," the Council on Ethics says.

In January this year, in response to the recommendation, ONGC told the Council on Ethics, "the company states that no incidents of human rights abuses have been reported within the joint ventures' areas of operation, and that there are no links between assaults on the civilian population and the company's operations."

Still, the fund is now excluding the Indian firm from its portfolio. The fund and Norges Bank continuously review the companies in which the sovereign wealth fund is invested and excludes companies violating human rights, and most recently, engaging in coal mining.

Last month, a Norwegian government panel said that the fund should ask oil firms in its portfolio to cut their emissions more drastically.

Norway is one of Europe's richest countries thanks to the decades of oil revenues amassed in the world's largest sovereign wealth fund with $1.4 trillion in assets and holdings of 1.4 percent of all of the world's listed companies, including stakes in oil majors Exxon, Chevron, Shell, and BP.  

By Tsvetana Paraskova for Oilprice.com

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