Norway Excludes San Leon from Sovereign Wealth Fund on Ethical Grounds

Norway's central bank, Norges Bank, has said that it will exclude San Leon Energy from its portfolio of investments for its massive sovereign wealth fund on ethical grounds. 

In a statement released March 4, the bank said that it was excluding San Leon from Norway's Government Pension Fund Global investment portfolio on the basis of "the risk of particularly serious violations of fundamental ethical norms."

The decision was taken after a recommendation from Norway's Council of Ethics on December 21 2015. Following an assessment from the council, it recommended that San Leon be excluded from Pension Fund Global portfolio on the basis that San Leon "contributes to serious violations of fundamental ethical norms through its onshore hydrocarbon exploration in Western Sahara on behalf of Moroccan authorities."

In its explanation of its decision, the Council of Ethics pointed to the lack of self-governance of the territory San Leon is exploring for hydrocarbons in the Western Sahara. 

"Under the framework of international law, the utilisation of natural resources in non-self-governing territories may be acceptable if it takes place in accordance with the wishes and interests of the local population. (...) The Council finds that it has not been satisfied that the operations take place in accordance with the wishes and interests of the local population."

San Leon declined to comment on Norges Bank's decision when contacted by Natural Gas Europe, with a spokesperson saying that "San Leon does not provide comments on other companies and/or funds and their investments."

Norges Bank has previously excluded companies from the Government Pension Fund Global on ethical or environmental grounds. In February it announced that it had divested from 73 companies in 2015 on social or environmental grounds, including a number of coal producers and coal-using energy companies. 

Mart Resources acquisition

The Norges Bank announcement brings to a close what had otherwise been a positive week for San Leon. 

Earlier this week, on March 2, San Leon announced that it had secured the funds it need to complete its acquisition of Mart Resources after twice extending the deadline on placing the funds into escrow. 

On March 3, Mart Resources announced that its shareholders had voted to approve the takeover, a result which San Leon welcomed on its website March 4. 

Erica Mills