DONG Energy has today agreed to sell its E&P business, including a stake in the Rosebank field, west of Shetland, to petro-chemical business Ineos for US$1.05 million, plus $250 million in contingent payments.
Ineos, which recently acquired the Forties pipeline system from BP, said the move, including taking on 440 staff, will make it the biggest private enterprise operating in the North Sea.
DONG's E&P business is produced 100,000 boe/d in 2016 and has about 570 MMboe of commercial and potential oil and gas reserves across the Danish, Norwegian and UK Continental Shelves, the latter being mostly west of Shetland.
Assets include stakes in Ormen Lange, the second largest gas field in Norwegian waters, Laggan-Tormore, a new gas field West of Shetland, which came on-stream early 2016, and Syd Arne is a large oil field in Denmark.
As part of the acquisition, Ineos, which bought DEA’s and part of Fairfield's UK portfolio in 2015, will pay $150 million related to the Fredericia stabilization plant and a contingent payment of up to $100 million subject to the development of the Rosebank field, operated by Chevron, west of Shetland. Ineos will also take on decommissioning liabilities of about DKK 7.0 billion.
Henrik Poulsen, CEO of DONG Energy, said the deal completes the transformation of DONG Energy into a pure-play renewables company.
Closing of the deal is subject to regulatory and certain other third party approvals and is expected to take place in the third quarter of 2017.
Ineos is a large petro-chemical companies and the 200th largest business in the world, employing, together with its JV’s around 18,500 people across 105 sites in 22 countries, with sales of $40 billion. It has grown rapidly in the petrochemicals sector over the past 20 years, more recently focussed on broadening its activity into the upstream E&P sector.