INEOS buys DONG oil & gas unit for US$1.05bn

Article by Staff Writer

INEOS has bought DONG Energy’s oil and gas business for US$1.05bn, plus US$250m in contingency payments.

DONG E&P produces 100,000 bbl/d from a number of long-life assets. It has an estimated 570m boe of oil and gas reserves across the Danish, Norwegian and UK continental shelves. DONG E&P’s assets are based on three main fields – Ormen Lange, the second largest gas field in Norwegian waters, Laggan-Tormore, a new gas field west of Shetland, and Syd Arne in Denmark.

INEOS says that the deal will make it the largest privately-owned enterprise operating in the North Sea and one of the top ten producers in the region overall. All 440 DONG E&P staff will transfer to INEOS employment.

Jim Ratcliffe, INEOS’ chairman, said that DONG E&P is a “natural fit” for the company as it continues to grow its upstream business and has a “highly successful and experienced team”.

INEOS, which formerly focussed on downstream chemicals, has in recent years increasingly invested in upstream assets. In April it bought the Forties Pipeline System (FPS) in the North Sea and the Kinneil Terminal, along with associated pipelines and facilities, from BP. It has also begun to import shale gas from the US, and in 2015, it bought 12 North Sea gas fields.

“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,” said Henrik Poulsen, CEO of DONG Energy, adding: “The transaction completes the transformation of DONG Energy into a leading, pure play renewables company.”

The deal is expected to be complete by Q3 2017.

Article by Staff Writer

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