Danish energy giant DONG Energy has confirmed plans to sell its oil and gas business as part of the company’s “strategic transformation” into a global leader in renewable energy.
“We have decided to initiate a process with the aim of ultimately exiting from our oil and gas business,” chief executive Henrik Poulsen said in a statement released yesterday alongside the company’s interim financial results. “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.”
DONG is the latest in a string of European utilities to refocus growth efforts on clean energy, following RWE’s recent move to split its business into two units, one focused on renewables and another focused on traditional power generation.
The process of offloading DONG Energy’s fossil fuelled assets began in September, when the company completed the sale of its entire gas distribution grid to Danish state-owned energy company Energinet.dk. Analysts predict the sale of its remaining oil and gas business could net DONG up to £2bn, which it has said it will plough back into renewable energy projects.
The firm currently has seven large offshore wind farms under construction, and earlier this summer was granted planning permission for the 1.2GW Hornsea Project Two, which will be the world’s largest offshore windfarm when it comes into operation in 2020.
The news came as DONG announced a seven per cent uptick in operating profits for the third quarter of this year, driven by a 19 per cent increase in wind output over the three-month period.
Speaking to reporters yesterday, Poulsen confirmed the sale will not spark a change of name for the company – DONG stands for Dansk Olie og Naturgas, which translates as Danish Oil and Natural Gas.
Poulsen gave no further details on how long the sale would take to complete, but said the company is already “engaging with potential interested buyers”.