DONG Energy has today announced it is primed to complete its transformation “into a leading, pure play renewables company” with the sale of all its oil and gas assets to UK-based chemicals giant INEOS.
The two firms confirmed this morning that INEOS has agreed to acquire the Dong Oil & Gas Business from DONG Energy A/S for an unconditional payment of $1.05bn. A further contingent payment $150m is agreed based on the Fredericia stabilisation plant project and another contingent payment of up to $100m is subject to the development of the Rosebank field.
The deal would also see INOES take over decommissioning liabilities of approximately $1bn.
The deal is subject to regulatory and other third party approvals and is expected to complete in the third quarter of 2017.
INEOS said the move would position the company as a top 10 operator in the North Sea and the biggest privately owned exploration and production business operating in the region.
Henrik Poulsen, chief executive of DONG Energy, said the deal would allow for the continued development of the oil and gas business. But he also reiterated that the Danish energy giant’s long term strategy was to now focus on the renewables market.
“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 and gas business,” he said in a statement. “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 has emerged as one of the leading players in the global offshore wind industry and only last week cut the ribbon on its latest project, the Burbo Bank Extension development in Liverpool Bay.
INEOS chairman, Jim Ratcliffe, who has previously angered environmental groups with plans to invest in fracking projects in the UK, said the deal was a “natural fit” for the company.
“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,” he said in a statement. “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.”