Mar.8 (Dow Jones) -- Norway抯 $1 trillion sovereign-wealth fund took a major step toward selling off some of its substantial holdings in oil-and-gas companies, a move to shield the oil-rich nation from the risk of permanently lower crude prices.

The Norwegian finance ministry proposed that the fund remove energy-exploration and -production companies from its portfolio, following a 2017 recommendation made by the central bank, which uses the fund to invest the proceeds of the country抯 oil industry.

Norway built its wealth on crude through its massive North Sea oil fields. The profits from those fields are managed by the country抯 sovereign-wealth fund, which is one of the world抯 largest investors. But the country faces a world where oil demand and prices may be on a lasting decline and has decided that its economy is too tethered to the price of crude.

The Scandinavian country joins some of the world抯 biggest oil producers, including Saudi Arabia and Russia, which are scrambling to diversify their dependence on petroleum-based wealth in the face of rising renewable energy use and efforts to reduce greenhouse gas emissions.

Global demand for oil is expected to peak in 2030, according to Equinor, Norway抯 state-backed oil company. After a period of price volatility, where oil whipsawed from over $100 a barrel in 2014 to below $30, oil-rich nations are adjusting to tighter budgets.

揟he oil price drop in 2016 reminded us how vulnerable we are to those kind of changes, said Henrik Asheim, lawmaker for Norway抯 center-right Conservative Party. 揑t抯 not a debate about climate, it抯 about financial risk.

After the downswing three years ago, Russia sold around one-fifth of energy giant Rosneft to Qatar抯 sovereign-wealth fund and Glencore PLC. Saudi Arabia proposed selling about 5% of Saudi Arabian Oil Co., better known as Aramco, but the initial public offering preparations stalled in 2018.

Oil and gas equities make up around 6% of the Norwegian sovereign-wealth fund抯 investments. The Stoxx Europe 600 Oil & Gas index fell to a 10-day low on the news of the potential divestment.

The proposal didn抰 encompass all energy companies, with only around 20% of the fund抯 oil and gas holdings included, as integrated oil companies such Total SA, in which the fund holds a 2% stake, won抰 be sold. The fund is a large shareholder in other international oil companies that won抰 be affected by the proposal, including Royal Dutch Shell, in which it has a 2.5% stake and BP PLC, in which it holds 2.3%.

Investments affected included the fund抯 1.1% stake in Anadarko Petroleum Corp, 2% stake in U.K.-listed Tullow Oil PLC and its 1.5% stake in Australian energy company Santos Ltd. In London, Tullow Oil shares were down 3.7% at 2.19 Friday.

揟he companies that they are still investing in are changing their focus to diversify their energy exposure to include other sources of energy production with wind and solar, said Halvor Strand Nyg錼d, analyst at Swedish bank SEB Group.

The relevant energy equities would be phased out of the fund gradually and plans would be prepared with the central bank, after the parliament抯 vote on the matter.

The government doesn抰 plan to sell shares in Equinor, in which it holds a 67% stake, or the state抯 direct financial interest in the Norwegian continental shelf.

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Fecha de publicación: 08/03/2019