DONG to drop oil and gas business for offshore wind

The Danish renewables developer is exiting its oil and gas business as part of a “strategic transformation” to focus on its growing offshore wind pipeline.

Danish energy developer DONG Energy will exit its oil and gas business to invest more into its offshore wind enterprise, one of the largest in the world.

Henrik Poulsen, the company's chief executive, said in its third-quarter report the move is a “strategic transformation” to become a global leader in renewables development. DONG, which has already been involved with some of Europe's largest offshore wind developments, won the right to build a 700MW project in July and is positioning itself to be a part of the US's burgeoning market.

DONG has transitioned itself over the past decade from being a regional fossil fuel utility to a major renewables developer. The company was owned by the Danish government before its initial public offering in June, the largest in Europe this year, which valued it at DKr98.2 billion ($15 billion; €13 billion).

The company reported $490 million profit in the third quarter this year. Thomson Reuters reported its oil and gas business is valued at around $2 billion. DONG did not mention a specific timeline for selling its assets.

DONG's current offshore wind pipeline totals 4.4GW of projects under construction. In July, it won the rights to build two wind farms off the coast of the Netherlands, the Borssele 1 and 2. Its bid of €72.70 per MWh for the first 15 years of the contract, excluding transmission costs, is one of the lowest ever for an offshore project.

The company also owns a subsidiary qualified to bid for the right to develop a project off the coast of Massachusetts, and DONG is one of 14 companies considering bidding on an area near Long Island, New York available for offshore wind development.