Sanctioned oil and banking good business for Norway

Norwegians are not allowed to buy or sell new bonds, equity or similar financial instruments with a maturity exceeding 90 days issued by Sberbank. This follows the European Unions sanctions from 2014 after Moscow’s annexation of Crimea and destabilising the situation in Easter Ukraine.

Norway follows the EU sanctions word-by-word.

The sanctions, however, do not hinder Norway’s Government Pension Fund Global to make very good money from its investments in Sberbank. The value of the fund’s 0,7% stake of the shares in the bank increased by 1,2 billion kroner (€126 million) last year, from 3,9 billion kroner to 5,1 billion kroner. The value growth follows a dobling of the value from 2015 to 2016, from 1,9 billion kroner to 3,9 billion kroner.

Norway’s pension fund is built on the income from the country’s oil and gas production and is nowadays worth more than $1 trillion.

Sberbank is Russia’s biggest and one of the largest in Europe. The Russian state owns 50%+ one voting shares, while the rest, including the 0,7% owned by Norway’s pension fund are dispersed among private and national investors. In total, 43% of the shares are held by foreigners.

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A European Union background note explains Sberbank being sanctioned «In order to restrict Russia’s access to EU capital markets.»

In total, the pension fund owns shares in 52 Russian companies at a value of 22,7 billion Norwegian kroner (€2,38 billion).

Another company on the list of investments is Gazprom Neft, a company’s who’s Arctic offshore oil activity is also sanctioned by EU and Norway.

The value of Norway’s 0,4% of Gazprom Neft’s shares was 664 million Norwegian kroner in 2017, up 70 million kroner from 2016.

Gazprom Neft operates the Prirazlomnoye field in the eastern Barents Sea, so far Russia’s only offshore field in production in the European part of the Arctic shelf.

Barents investments

Two of the other companies with Norwegian investments in Russia have production in the Murmansk region, Acron produces mineral fertilizer in Kirovsk, the same does PhosAgro. The value of the 2,31% of the shares in Acron increased with 129 million kroner to 514 million kroner from 2016 to 2017, while PhosAgro is up 267 million kroner to 658 million kroner in the same period.