Danish energy company Dong Energy has received regulatory approvals for the divestment of its upstream oil and gas business to INEOS, and it expects to sever all ties to its oil and gas background on Friday, as part of its strategy to focus on renewables.
Earlier this year, on May 24, DONG Energy said it would divest the entire share capital of DONG E&P A/S to INEOS, including that closing of the transaction was subject to certain regulatory approvals.
Under the agreement, Dong is divesting its oil and gas business for an unconditional payment of $1.050 billion (DKK 7 billion) on a cash and debt free basis, a contingent payment of $150 million (DKK 1.0 billion) related to the Fredericia stabilization plant and a contingent payment of up to $100 million (DKK 0.7 billion) subject to the development of the Rosebank field, in the UK North Sea.
“We are pleased to announce that today the parties have received the regulatory approvals from the Danish and Norwegian authorities to the indirect transfer of the oil and gas licenses in the respective countries,” Dong Energy said on Thursday.
As part of the transaction, INEOS takes over all decommissiong liabilities. In accordance with the regulatory framework in Denmark and Norway, DONG Energy assumes a secondary liability for the decommissioning of existing Danish and Norwegian offshore facilities. The parties expect to complete the transaction on Friday, September 29, 2017.
The Danish company had in 2016 started the process to ultimately get rid of the oil and gas business had been initiated. In May this year, Dong said the INEOS transaction would complete the transformation of DONG Energy into a” leading, pure play renewables company.”
At closing of the transaction, approximately 440 employees working for DONG Energy Oil & Gas will transfer to employment with the Ineos group, Dong said in May, 2017.
Offshore Energy Today Staff