DONG sells oil & gas assets to INEOS, making the company the largest private enterprise operating in the North Sea
Petrochemical manufacturer INEOS announced today that it agreed to acquire all of DONG Energy’s oil and gas assets for total consideration of approximately $1.3 billion. The acquired assets produced 100 MBOEPD in 2016 and hold approximately 570 MMBOE of reserves across the Danish, Norwegian and U.K Shelves, according to a press release from the company Wednesday.
INEOS will purchase Dong Oil & Gas for an unconditional payment of $1.05 billion, plus a contingent payment of $150 million related to the Fredericia stabilization plant and a contingent payment of up to $100 million subject to the development of the Rosebank field.
The primary assets included in the acquisition are the Ormen Lange, the second largest gas field in Norwegian waters, Laggan-Tormore, a new gas field West of Shetland which came on-stream early 2016, and Syd Arne, an oil field in Denmark.
The acquisition will position INEOS as one of the top ten companies in the North Sea in terms of production and make it the biggest privately owned E&P operating in the basin.
Jim Ratcliffe, INEOS chairman says, “DONG Energy’s Oil & Gas Business is a natural fit for INEOS as we continue to expand our Upstream interests. 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 petrochemical businesses, focusing 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”.
On completion, 440 people will transfer to INEOS, working across a portfolio of production, development, exploration and appraisal assets in Denmark, Norway and U.K. The business will form part of INEOS Upstream, a business division of the INEOS Group of Companies.
DONG becomes a renewable energy company
With the sale of its oil and gas assets, DONG Energy is now focused entirely on renewable energy sources. The company’s portfolio is now primarily wind power with some bioenergy and thermal power. In October of 2016, DONG installed its 1,000th offshore wind turbine.
The company said that from 2016 to 2020, it expects to build more offshore wind capacity than it built altogether in the preceding 25 years.
“By 2020, we aim to have doubled our installed capacity compared with 2016 from 3.0 GW to 6.5 GW. The installed capacity in 2020 is equivalent to the annual electricity consumption of 16 million Europeans,” the company said.
