A UK county council has refuted claims of conflict of interest that touches on its 1.9 million investment in French oil firm Total that is leading fracking operations in the locality.
Lincolnshire County Council said that its pension fund stopped dealing with Total’s shares four years ago. Total plans to invest 30 million pounds in drilling two sites in the area, fuelling uncertainty over bias in making decisions on fracking in future. However, a spokesman for the county said the pension fund was an independent outfit that isn’t involved in decision-making.
“The pension scheme operates within a set of clear investment principles and is overseen by a pension committee, which makes its decisions wholly independently from the county council,” David Forbes, the county’s assistant director of resources, told Lincolnshire Echo.
“Councillors who sit on this committee do not sit on the planning committee, and so have no bearing over planning applications,”added Forbes. “The pension committee has a legal duty to achieve the best rate of return possible on investments. For this reason, the pension fund maintains a wide and varied portfolio, much of which is managed externally by fund managers who seek strong, sustainable companies with good all-round credentials.”
Lincolnshire’s pension fund is presently valued about 1 billion pound. It has also bought stocks in other energy firms such as BP, Shell and Gulf. Total plans to extract shale gas in Lincolnshire in the Gainsborough Through, a geological formation that belongs to the Pendleian Shale.
Fracking or hydraulic fracturing is a controversial method of oil and natural gas extraction that involves blasting a mixture of chemicals, water and sand into underground rocks to release trapped pockets of oil and shale gas. The method is banned in France, Total’s home country. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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