The bank that manages Norway's US$1 Billion state-run sovereign wealth fund is advising the government to drop its investments in oil and gas stocks.

Norges Bank governor Egil Matsen said the step would make the country "less vulnerable to a permanent drop in oil and gas prices", and "based exclusively on financial arguments and analyses of the government's total oil and gas exposure." 

The advice might seem a little odd, considering where the money comes from:  The sovereign wealth fund is generated from the profits of Norway's vast oil and gas sector, western Europe's largest.  Norges Bank said that investing money back into the energy sector meant the government's exposure to the price of crude was too high, particularly given the country's majority stakes in Statoil ASA.

"Oil price exposure of the government's wealth position can be reduced by not having the fund invested in oil and gas stocks," said Matsen.

Norway's Finance Ministry won't announce its view on the matter until autumn of next year, but shares in major oil firms such as Shell, BP, and Exxon Mobil all traded lower after the announcement.