Dong recently announced it was no longer looking at oil and gas as a long-term strategic commitment, now Danish energy giant Dong Energy has confirmed it will exit the oil and gas market to focus on the renewables sector.
The organisation has stated that its strategic future lied with the development of a clean energy portfolio based on establishing Dong as the market leader in offshore wind, bioenergy and green distribution.
Dongs has confirmed that the process to let go of the oil and gas arm of their business was already underway.
Henrik Poulsen, CEO and President, said: “We have decided to initiate a process with the aim of ultimately exiting from our oil and gas business. 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. There can be no assurance as to the outcome or the timing of the completion of the process.”
Dong’s profit for the period amounted to £400 million in Q3 2016, £350 million higher than in Q3 2015. When it comes to the company’s oil & gas business, Dong’s profit during the third quarter 2016 was £200 million, a decrease from £350 million in Q3 2015.
The company’s revenue amounted to £5.95 billion in 9M 2016. This is a 10% decline on the previous year which was due to significantly lower oil and gas prices and lower gas sales.
Referring to the oil & gas business performance during the period, Poulsen said: “Cost performance continues to improve, driven by continued renegotiation of supplier contracts, reduced exploration spending and improved operational efficiency, with total cash spend decreasing by 36% compared with the same period last year. We now expect O&G to be cash flow positive in 2016, a year earlier than previously communicated.”
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