Posted: Fri 4th Mar 2022

Ukraine conflict: Flintshire Council administered pension fund to offload stake in Russian oil company

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Friday, Mar 4th, 2022

A public sector pension scheme administered by Flintshire Council is to disinvest its holding in a Russian oil company following Vladimir Putin’s unprovoked attack on Ukraine.

Administrators of the Clywd Pension Fund have confirmed to Deeside.com that its stake in Lukoil is to be offloaded due to the invasion.

The fund is part of the Local Government Pension Scheme (LGPS) and provides death and retirement benefits for local government employees in North East Wales.

Recent data stated there are over 49,000 Clwyd Pension Fund scheme members, 17,000 contributors, 18,000 deferred contributors and 14,000 pensioners.

According to data published by UK Divest, Clywd Pension Fund investments include £1,852,505 in Lukoil, the second largest company in Russia after Gazprom.

Lukoil is a Moscow headquartered oil and gas company and is responsible for around 2% of the world’s oil production.

The company operates thousands of petrol stations including some in the United States.

Lukoil has been operating under US sanctions since 2014 due “to continued Russian efforts to destabilise eastern Ukraine.”

The company took the unprecedented step yesterday of urging Putin to end his invasion of Ukraine.

Lukoil’s billionaire founder Vagit Alekperov, called for an “immediate cessation of the armed conflict” and expressed concern over the “tragic events.”

Clywd Pension Fund also has a £20m stake in British energy giant BP which owns 20 per cent of Russian state-owned energy firm Rosneft.

BP announced last week it was selling its share in Rosneft worth US$14 billion following the start of the conflict in Ukraine.

In a statement to Deeside.com, on behalf of Wales Pension Partnership and the Local Government Pension Scheme in Wales, Cllr Clive Lloyd said:

“We are deeply saddened by the situation in Ukraine and our thoughts are with the Ukrainian people.”

“Our total exposure to Russian Investments is minimal at less than 1%.”

“Even so, in light of the terrible events we have witnessed and the economic sanctions imposed internationally, as a collective we have decided to divest from these holdings as soon as is practically possible.”

“Given the circumstances, we do not believe that engagement with these companies presents a viable option.”

According to a report by the BBC, Welsh councils have up to £200m tied up in Russian funds and companies as part of their pension schemes.

The Welsh Local Government Association said councils are reviewing their position after the invasion of Ukraine.

The £200m represents less than one per cent of the £20bn Welsh councils have invested overall in their pension schemes beyond Russia, the BBC states.

The WLGA said all eight pension funds in Wales follow responsible investment policies under national guidance.

It added: “Investment managers are reviewing their investment strategies and there has been engagement across all eight pools in England and Wales.”

Earlier today Welsh Government said they are working with other public bodies in Wales “to identify and take action on any investments held associated with the Russian state”.

 

 

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