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Published on October 28th, 2016 | by Joshua S Hill

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DONG Energy Considering Divesting Oil & Gas Business

October 28th, 2016 by  


Danish energy giant DONG Energy has confirmed rumors that it is investigating the sale of its oil & gas business, and that JP Morgan has been contracted to conduct a preliminary market assessment.

News that DONG Energy is considering divesting itself of its oil & gas business should come as no real surprise to those who have been following the company’s doings lately.

The company confirmed in May that it would be following through with an IPO — an IPO which became the largest initial public offering for 2016 in June. At the time DONG Energy confirmed its intentions to go through with its IPO, it also divested itself of its Danish gas business in a move that was “part of the political agreement regarding DONG Energy’s Initial Public Offering.” The company had already completed the divestment of its onshore wind projects back in December of 2014 in an effort to focus solely on offshore wind projects.

2016 has seen the company take several steps which might have presaged a potential divestment of its oil & gas business, despite the fact that the company announced in January that it intended to retain its exploration & production business. In February, the company reported its 2015 financial figures, which showed the company had suffered DKK 15.8 billion after tax in impairment losses, including DKK 14.8 billion in the company’s oil & gas division caused by the continued fall in oil and gas prices.

DONG Energy followed this news in July with the announcement that it had divested itself of five of its Norwegian oil & gas fields.

At the time DONG Energy was announcing its IPO intentions, it also explained that it would manage its oil & gas business solely for cash, and that future cash stemming from its oil & gas business would serve to further the company’s investments in renewable energy. Unsurprisingly, therefore, this “confirmed that the oil & gas business was not considered a long-term strategic commitment for DONG Energy.”

Subsequently, DONG Energy confirmed on Wednesday that it was “reviewing strategic options regarding the future of the oil & gas business, and that J.P. Morgan has been engaged to conduct a preliminary market assessment.”

However, as of yet, “DONG Energy has not made a decision to divest the oil & gas business.”

 
 
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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



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