Danish offshore wind energy giant DONG Energy has concluded, after a strategic review, that it will keep its Exploration & Production business.
DONG Energy announced back in September of 2015 that it would undertake a strategic review of its Exploration & Production (E&P) business — the company’s oil and gas division, which according to its website produces the equivalent annual consumption of oil and gas of more than ten million Europeans.
Over the past two years, DONG Energy has been transitioning away from being a renewable energy development company to being a company focused on offshore wind development — having divested itself of all its onshore wind projects in December of 2014. The company’s strategic review of its Exploration & Production business concluded that the company is committing to building “a world-class clean energy company with a portfolio based on leading competences in offshore wind, bioenergy, and green distribution and customer solutions.”
However, DONG Energy has also decided to maintain its E&P business as part of the company’s planned IPO.
The DONG Energy E&P business maintains a high-quality portfolio of oil and gas assets throughout Denmark, Norway, and the UK, but concluded that its E&P business “needs to adapt to the significant decline in oil and gas prices.”
DONG Energy is set to reveal its Annual Report for 2015 on the 4th of February, its first financial update since its third quarter update published late-October, 2015, at which point the company reported earnings up 14% over the first 9 months of the year. To account for the decline in oil and gas prices, DONG Energy is expecting to make a write-down of approximately DKK 16 billion in the carrying value of its E&P business in its 2015 annual accounts.