Dong Energy to get rid of upstream oil & gas today
The Borkum Riffgrund 1 offshore wind farm. Source: Dong Energy A/S. License: All rights reserved.
Danish offshore wind-focused utility Dong Energy A/S (CPH:DENERG) said on Thursday that regulators at home and in Norway have allowed the company to sell its oil and gas licences in the two countries as part of its upstream exit.
As announced in May, Dong Energy agreed to offload its upstream oil and gas operations, held by Dong E&P A/S, to London-headquartered INEOS for an unconditional payment of USD 1.05 billion (DKK 7 billion) on a cash and debt free basis.
With this transaction, which should close today -- September 29, Dong Energy is concluding its transformation into a "pure play renewables company". It aims to have 6.5 GW of installed offshore wind power generating capacity by 2020. At the end of 2017’s second quarter, Dong Energy had 3.8 GW of installed offshore wind farms.
The vendor said in its statement that INEOS will take over all decommissiong liabilities and Dong Energy will assume a secondary liability for the decommissioning of existing Danish and Norwegian offshore facilities.