The Tobacco-lization of Big Oil
Crude oil is becoming dirtier and it is losing maidens. The sovereign wealth fund of Norway, the largest equity investing fund in the world, controlling nearly 1.5% of the total global equity war chest, is cutting exposures to (fossil-based) energy companies. Now the World Bank has joined the march to greenhood, phasing out key upstream investments in the oil and gas sectors, starting 2019.
“As a global multilateral development institution, the World Bank Group is continuing to transform its own operations in recognition of a rapidly changing world,” the bank said in a statement.
“The World Bank Group will no longer finance upstream oil and gas, after 2019,” it added.
Note the statement: The World Bank has seen a new world, and is realigning its investment thesis to be in sync.
This is what will happen: by 2030, any stock portfolio with oil & gas companies will be seen in the same league as tobacco and coal. People still buy stocks of tobacco companies but those are special people. Major investment funds have since stopped investing in tobacco.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
This decision of the World Bank will be imitated by other investors; World Bank had followed Norway. Expect severe dislocations in the pricing of oil & gas equities in the near future. The implications will affect not just the companies but the countries that depend on oil & gas. (Add this to the energy technological redesign coming from Elon Musk and others, you will see a new energy future.)
Simply, they are tobacco-lizing big oil and in the near future the pension funds will join the party and some university endowments will fire fatal bullets. If World Bank can make this decision in the Trump era, the squeeze is coming home for big oil. Nigeria, it's time - we do not have much time to get out. Big oil is the new tobacco and the world is running away from it.
Africa will remain the punching bag of these globalists and their sometimes questionable agendas. Africa might not be ready for some of these things in 50 years time, but the world is moving on. If you complain, the World bank and its equivalents will package a loan for you, which ends up underdeveloping rather developing the continent. I think each country should just look out for what favours it, and cut away from this globalisation bandwagon. Some countries have their own peculiarities, so no one should even worry about 'staying on the line', especially if the 'line' is not doing your country any good.
