(Bloomberg) -- After revealing it wants to dump all oil stocks in a market-shattering bang in 2017, Norway’s $1.1 trillion wealth fund’s actual divestment could now be so small it hardly matters.

The fund’s initial plan was heavily diluted in a political compromise that shielded the world’s biggest oil companies. Now technical adjustments look set to reduce the divestment by a further 30%, meaning the selloff would be smaller than the fund’s roughly $6 billion stake in oil giant Royal Dutch Shell Plc.

It’s “like the mountain that gave birth to a mouse,” said Knut Anton Mork, an economics professor and former bank economist who’s followed the fund’s development and led a commission on its strategy.

The world’s biggest wealth fund, built from decades of petroleum production to safeguard future generations of Norwegians, sent shock waves through global markets when it said it wanted to sell $37 billion in oil and gas stocks. While the fund argued it was a move to better spread Norway’s overall risk, the announcement was seized upon by climate activists as a key moment for fossil-fuel divestment movement.

But the Norwegian government, fronted by two petroleum-friendly parties, decided in March to spare the big integrated companies such as Shell and BP Plc, partly because they invest in renewable energy. Instead the selloff would only include pure exploration and production companies, whittling down the divestment to about $7.8 billion. But that estimate was based on a category from index provider FTSE Russell that also included marketing, refining and petrochemical companies.

Since then, the classification system has changed to include a “Crude Producers” category stripped of downstream. The fund will give its advice on the final details of the divestment to the Finance Ministry by mid-September, and declined to comment until then.

Mork, as well as SpareBank 1 Markets Chief Economist Harald Magnus Andreassen, both said it’s likely that the Finance Ministry will pick the “Crude Producers” category for the divestment.

The fund’s holdings in that group at the end of 2018 was $5.7 billion, according to Bloomberg calculations. Its 2.5% stake in Shell was worth $5.9 billion at the same time.

Andreassen, who participated in a government-led panel that advised against the original plan because it viewed even that as a marginal insurance against lower oil prices, said there’s now “nothing left” of the fund’s initial proposal.

“The resulting compromise doesn’t have anything to do with an oil-price insurance anymore,” he said. “This looks like a symbolic measure.”

Steinar Holden, an economics professor at University of Oslo who supported the initial proposal, said it was “a pity” the plan didn’t go through and that the effect was now “small.”

In an emailed response to questions, State Secretary Marianne Groth repeated the Finance Ministry’s argument that the divestment was appropriate even though the impact will “probably be limited.”

“Since the state’s petroleum income mainly comes from upstream activity, it’s more accurate to remove upstream companies, rather than to exit a broadly diversified energy sector altogether,” she said.

‘Scandalous’

Activists and legislators are vowing not to give up on making the divestment more meaningful. The plan has not only lost its clout as a means to spread Norway’s risk, but its value as a figurehead for the global campaign against fossil fuels has also been diminished.

The dilution of the proposal is “completely scandalous,” said Martin Norman, Greenpeace’s finance campaign director for the Nordics.

The opposition Socialist Left Party, which has vowed to fight to broaden the exclusion to include integrated oil companies, said the latest estimate for the divestment, equal to just 0.5% of the fund’s value, only strengthened its point.

“We’ve always viewed this as the first step,” lawmaker Freddy Andre Ovstegard said by phone. “We need to pull the fund out of all fossil energy.”

Here is the likely disposal list:

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Stephen Treloar

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