While pursuing its growing clean-energy businesses, Denmark’s DONG Energy confirmed on Wednesday that it does not consider its oil and gas business a long-term strategic goal, although it stopped short of saying that it would sell it.
“DONG Energy confirms that it is reviewing strategic options regarding the future of the oil & gas business, and that J.P. Morgan has been engaged to conduct a preliminary market assessment. However, DONG Energy has not made a decision to divest the oil & gas business,” the company said in the statement, addressing media speculation.
When it was announcing its initial public offering (IPO) earlier this year, DONG Energy had said that it would use cash flows from its oil and gas division to fund investments in renewables, the company said today.
In June of this year, DONG Energy debuted on the stock market in Europe’s biggest IPO of the year up to that point. The company sold 17.4 percent of its shares, placing the value of the whole company at around US$14.4 billion (98.2 billion Danish kroner).
The company’s oil and gas assets may be worth up to US$2.056 billion (14 billion Danish kroner), according to Sydbank analyst Morten Imsgard, as quoted by Reuters.
The analyst does not rule out the possibility that another Danish company, logistics conglomerate AP Moeller-Maersk A/S, may buy DONG Energy’s oil & gas division to merge it with its own oil division.
Maersk Oil is currently splitting from AP Moeller Maersk, and the parent group said at the announcement of its plans that the split will take place over the next two years and might see its oil and gas, drilling, tanker, and supply vessel businesses split off either individually or all together, via joint ventures, mergers, or listings.
According to a Bloomberg article from last month, last year Maersk and DONG had started preliminary talks on whether Maersk might acquire DONG Energy’s oil and gas business, but talks fell through after the companies failed to agree on a price.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.