Dong completes transformation with oil & gas disposal, by Andrew Lee, Recharge News, 24 May 2017
wind pacesetter Dong Energy hailed its “transformation into a leading pure-play
renewables company” after agreeing to sell its oil and gas business for up to
group struck a deal with the UK’s Ineos that will see the latter take on Dong
E&P when the transaction completes in the third quarter of 2017.
Dong first announced plans to divest its fossil-focused assets
last year, and the deal will see it receive $1.05bn unconditionally and another
$250m depending on developments at certain assets.
The sale will
give Dong more firepower to fund its global offshore wind expansion plans,
which have already seen it take the lead in the sector.
The company is
on track to have 6.5GW in place off Europe by the end of the decade, and last
year flagged an ambition to have stakes in 11-12GW of offshore capacity by
That will see
the group move into new markets such as the US and Taiwan – it already has
interests in projects in both nations.
signalled a new phase for the offshore wind sector when it lodged ‘zero
subsidy’ bids for future plants off Germany.
Dong CEO Henrik
Poulsen said: “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.
With the agreement with Ineos we’ve obtained just that.”
transaction completes the transformation of Dong Energy into a leading, pure
play renewables company.”
state-controlled Dong – in which investment giant Goldman Sachs also holds a
stake – is the most notable example of a fossil-fuel-based operation pivoting
towards clean energy.
Statoil and Anglo-Dutch group Shell have also entered the offshore wind sector
– although not to anything like the same extent as Dong – while France’s Total
is a serious player in the solar industry.