Norwegian wealth fund drops ONGC over South Sudan ties

Norway's $1.4bn national wealth fund has dropped India's ONGC from its portfolio of investments because of concerns over its activities in war-torn South Sudan, the fund's manager said on September 2.

South Sudan remains in the grip of violent clashes between rival factions three years after a peace agreement was reached between the government and opposition groups. Norge Bank Investment Management, which manages the Norwegian Government Pension Fund Global (GPFG), said it was following the recommendation of its Council on Ethics in excluding ONGC from the portfolio.

The council said separately that ONGC should be excluded "due to an unacceptable risk that the company is contributing to serious violations of the rights of individuals in situations of war or conflict." 

ONGC produces oil in South Sudan via two joint ventures with South Sudan's state oil company Nilepet and others.

"Control of the petroleum resources in the country has been a key driver in the conflict," the council said.

GPFG has also excluded three Israeli firms Elco, its subsidiary Electra, and Ashtrom, over their ties to Israeli settlements in the West Bank, on the recommendation of the council.

The fund, which for decades has accumulated revenues from oil and gas production in Norway, also last year excluded four Canadian oil sands producers – Imperial Oil, Canadian Natural Resources, Cenovus Energy and Suncor Energy – for producing "unacceptable" greenhouse gas emissions, following the council's advice. A Norwegian government-appointed commission last month urged the fund to do more to get companies in its portfolio to reduce their emissions, by making climate risks a more central part of the fund's mandate.