DONG Energy to sell oil, gas unit
Sale turns Danish firm into leading, pure play renewables company says CEO
Danish utility and offshore wind farm developer DONG Energy has agreed to sell its oil and gas business to petrochemicals firm Ineos for $1.3 billion (Dh4.7 billion), it said yesterday, the latest in a string of North Sea deals.
The sale is a blow to shipping group A.P. Moller-Maersk, which had sought to merge its oil and gas business with DONG into a company worth more than $10 billion as part of a major restructuring. Talks between the two stalled late last year over price, sources said in December, and Maersk Chief Executive Soren Skou said in January he saw a listing of the energy unit as the more likely option.
For DONG Energy, the world’s biggest operator of offshore wind power, the sale marks a step away from fossil fuels as it seeks to focus solely on offshore wind.
“The transaction completes the transformation of DONG Energy into a leading, pure play renewables company,” DONG Chief Executive Henrik Poulsen said in a statement. Ineos, which already owns the Grangemounth refinery in Scotland and last month bought the Forties pipeline system in the North Sea from BP, has been looking to expand into exploration and production.
Oil prices
Deal-making in the North Sea has picked up in recent months amid steadier oil prices, following a slump that brought transactions to a halt in the ageing basin.
Ineos joins a number of private equity-backed companies such as Chrysaor and Siccar Point that have in recent months acquired large assets in the North Sea from operators such as Royal Dutch Shell and Austria’s OMV.
Also this month, Neptune Oil & Gas agreed to buy a majority stake in French utility Engie’s exploration and production business for $3.9 billion.
Ineos will take over decommissioning liabilities of around 7 billion Danish crowns ($1.05 billion), DONG said, but DONG will retain all hedge contracts related to the oil and gas business, which had a market value of 1.9 billion crowns by end-March.