(refiles to removed typographical error in headline, no change

to text)

By Isla Binnie

NEW YORK, March 21 (Reuters) - A senior BlackRock ( BLK )

executive said on Thursday the world's largest asset manager was

"dismayed" by a Texas state fund's move to pull $8.5 billion in

assets from its management, and urged the fund's administrators

to reconsider.

Texas State Board of Education Chair Aaron Kinsey said on

Tuesday the Texas Permanent School Fund (PSF) was terminating a

contract with BlackRock ( BLK ), covering around 15% of its assets, to

comply with a 2021 state law that curbed agencies' business with

financial firms accused of boycotting energy companies.

It was the latest broadside in a tussle between politically

conservative officials and Wall Street firms over considering

environmental, social and governance (ESG) factors in investing.

BlackRock ( BLK ) Vice Chairman Mark McCombe wrote to Kinsey on

Thursday that the firm had generated $250 million for PSF since

2006 and repeated previous rejections of the allegation it

discriminates against oil and gas firms.

"We urge you to reconsider your decision and prioritize

Texas schools and families who have benefited from BlackRock's ( BLK )

consistent, long-term investment out-performance," McCombe wrote

in the letter.

Kinsey said he made the move to fulfil his duty to manage

money for the energy-producing state.