Dong Energy confirms oil and gas exit

Dong Energy confirms oil and gas exit

Danish energy major Dong Energy has confirmed its exit from the oil and gas business, having recently appointed J.P. Morgan to review options, as it moves to focus solely on offshore wind power.

“We have decided to initiate a process with the aim of ultimately exiting from our oil and gas business. This should be seen in the context of Dong Energy’s strategic transformation towards becoming a global leader in renewables and a wish to ensure the best possible long-term development opportunities for our oil and gas business. There can be no assurance as to the outcome or the timing of the completion of the process,” Henrik Poulsen, Dong president and CEO said.

“O&G continues the substantial restructuring of the business and delivered a strong operational performance in the first nine months. Cost performance continues to improve, driven by continued renegotiation of supplier contracts, reduced exploration spending and improved operational efficiency, with total cash spend decreasing by 36% compared with the same period last year. We now expect O&G to be cash flow positive in 2016, a year earlier than previously communicated,” Poulsen said in the company’s nine month report.

According to Poulsen, Dong has spent the last 12-15 months restructuring its oil and gas business to “focus on high quality, low cost assets” and “a combination of a number of different factors” had made it decide to sell.

Dong posted a profit of around $490m in the third quarter of 2016, $431m higher when compared to the same period in 2015.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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