• 4 minutes What If Canada Had Wind and Not Oilsands?
  • 8 minutes EU Confirms Trade Retaliation Measures vs. U.S. To Take Effect on June 22
  • 17 minutes Could oil demand collapse rapidly? Yup, sure could.
  • 9 mins Tariffs to derail $83.7 Billion Chinese Investment in West Virginia
  • 1 hour U.S. Withdraws From U.N. Human Rights Council
  • 4 hours Could oil demand collapse rapidly? Yup, sure could.
  • 4 hours EU Confirms Trade Retaliation Measures vs. U.S. To Take Effect on June 22
  • 21 hours Are EVs Safer Than Combustion Engine Vehicles?
  • 4 hours North Korea, China Discuss 'True Peace', Denuclearization
  • 19 mins What If Canada Had Wind and Not Oilsands?
  • 1 hour Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 4 hours WE Solutions plans to print cars
  • 16 mins Saudi Arabia turns to solar
  • 5 hours Gazprom Exports to EU Hit Record
  • 10 hours EVs Could Help Coal Demand
  • 10 hours Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 19 hours Oil prices going down
  • 19 hours Russia, Saudi Push For Big Hike In Oil Output Despite Iran Opposition
  • 19 hours Australia mulls LNG import
Can U.S. Shale And OPEC Find Common Ground?

Can U.S. Shale And OPEC Find Common Ground?

OPEC and U.S. shale have…

Australia Looks To Tackle Its Looming Gas Shortage

Australia Looks To Tackle Its Looming Gas Shortage

The world’s soon-to-be top liquefied…

Total CEO Dismisses Norway’s Wealth Fund Claims

North Sea Oil Platform

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.

As early as last November, when the industry and analysts were still digesting the prospect of the Norwegian fund possibly ditching oil stocks and potentially sending shockwaves to the share prices of oil firms and prompting other funds to follow suit, Total’s Pouyanne said that he was not worried about a possible exit of the fund, because this would happen gradually over time.

“I can tell you that, obviously, the managers of the fund who we know very well...are not going to sell in a manner that would lead to a stock-price collapse,” Pouyanne told shareholders at an annual gathering in November.

Related: Is This The Future For OPEC?

Speaking to Bloomberg today, Total’s CEO said:

“When you buy a Total share, you don’t buy a barrel of oil.”

“You buy much less volatility,” Pouyanne added, arguing that Big Oil—integrated companies that are also active in refining, retail, and trading—are diversified to reduce the risk when oil prices tumble.

Pouyanne, however, did not suggest what the fund should do with the oil stocks. “They can do what they want,” he said. “They are free.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


x

Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News