• 4 minutes China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 7 minutes Beijing Must Face Reality That Taiwan is Independent
  • 11 minutes Phase One trade deal, for China it is all about technology war
  • 14 minutes Shale Oil Fiasco
  • 27 mins We're freezing! Isn't it great? The carbon tax must be working!
  • 19 mins Trump has changed into a World Leader
  • 3 hours Which emissions are worse?: Cows vs. Keystone Pipeline
  • 1 hour Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 12 hours What's the Endgame Here?
  • 7 hours Indonesia Stands Up to China. Will Japan Help?
  • 3 hours Might be Time for NG Producers to Find New Career
  • 12 hours Turkey Muscles-In on Israel-Greece-Cyprus EastMed Gas Pipeline Deal. Erdogan Still Dreaming of Ottoman Empire II.
  • 6 hours Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 19 hours Trump capitulated
  • 19 hours US Shale: Technology
  • 20 hours Gravity is a scam!

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:



Join the discussion | Back to homepage


Leave a comment

Leave a comment

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