DONG Energy Divests Upstream Oil & Gas Business To INEOS For $1 Billion

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Danish wind energy giant DONG Energy announced Wednesday that it has agreed to divest its upstream Oil and Gas business to London-based chemicals company INEOS for $1.05 billion.

In October of last year it was first rumored that DONG Energy was investigating the possibility of divesting itself of its Oil and Gas business and that it had contracted JP Morgan to conduct a preliminary market assessment. A month later as part of its third-quarter earnings report, the company confirmed that it was, in fact, looking to divest its Oil and Gas business in an attempt to focus entirely on renewable energy technologies such as wind and biomass. The business produced 100,000 barrels of oil equivalent per day in 2016, and contains approximately 570 million barrels of oil equivalent of commercial and potential oil and gas reserves across the Danish, Norwegian, and UK Continental Shelves.

Announced on Wednesday, DONG Energy revealed that it has now agreed to divest the entire capital of its Oil and Gas business (DONG E&P A/S) to London-based multinational chemicals company INEOS for an unconditional payment of $1.05 billion (DKK 7 billion), as well as a $150 million (DKK 1 billion) contingent payment based on the Fredericia stabilization plant, and a second contingent payment of up to $100 million (DKK 0.7 billion) subject to the development of the Rosebank field. The results of the sale will help DONG Energy live up to its goals of focusing on renewable energy, and will result in INEOS becoming a Top 10 company and the biggest private enterprise operating in the North Sea.

INEOS will take over decommissioning liabilities of approximately DKK 7 billion, while DONG Energy will retain all cash flows through to 30 June, 2017 and retain all hedge contracts related to the Oil and Gas business.

“Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the Oil & Gas business,” said Henrik Poulsen, CEO of DONG Energy. “With the agreement with INEOS we’ve obtained just that.”

“The transaction completes the transformation of DONG Energy into a leading, pure play renewables company.”

“DONG Energy’s Oil & Gas Business is a natural fit for INEOS as we continue to expand our Upstream interests,” added Jim Ratcliffe, INEOS chairman. “This business is very important to us at this stage of our growth plans and we are delighted with the expertise that comes with it. We have been successful in our petro-chemical businesses, focussing on operating our assets safely, efficiently and reliably and we intend to do the same with our oil & gas assets. We are keen on further growth and already see lots of opportunity within this impressive portfolio when it transfers to INEOS.”


Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Latest CleanTechnica TV Video


Advertisement
 
CleanTechnica uses affiliate links. See our policy here.

Joshua S Hill

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.

Joshua S Hill has 4403 posts and counting. See all posts by Joshua S Hill