DONG Energy

History

The Danish state-owned company Dansk Naturgas A/S was founded in 1972 to manage gas and oil resources in the Danish sector of the North Sea. After some years, the company was renamed to Dansk Olie og Naturgas A/S (DONG), meaning Danish Oil and Natural Gas. At the beginning of the decade of the 2000s, DONG started to expand itself into the electricity market by taking long positions in electricity companies. In 2005, DONG acquired and merged Danish electrical power producers Elsam and Energi E2 and public utility (electricity distribution) companies NESA, Københavns Energi and Frederiksberg Forsyning. The result of the merger was the creation of DONG Energy. The merger was approved by the European Commission on 14 March 2006.

DONG sold a power cable accessing the world’s largest wind farm to its partners, E.ON and Masdar for around $728 million in September 2013. As part of a restructuring plan—announced in 2013—to cut costs, reduce debt, and bolster investments in wind farms and oil and gas exploration, DONG sold an 18% stake to the US investment bank Goldman Sachs. The sale was unpopular in Denmark's governing coalition and caused protest resignations of six cabinet ministers and the withdrawal of one party (Socialist People’s Party) from the government.

In 2015, DONG had a deficit of 12 billion DKK, the largest of any Danish company ever. It was due to development problems of the Hejre (Heron) field. For all of 2016, DONG has fixed its oil income at $80/bbl, despite market prices of $35/bbl in January 2016. Oil and gas supplies about half of DONGs income, while offshore wind turbines supplies most of the other half.

Shareholders

Danish Government holds the majority of DONG Energy shares (50.1%). The rest of the shares are owned by New Energy Investment S.à r.l. (a subsidiary of Goldman Sachs), Capital Group Companies (5.01 %), SEAS-NVE, and smaller shareholders (each below 5 %). According to a political agreement, the Danish Government shall maintain a majority in the company until 2025. Reduction of the ownership below 50% requires political agreement of Danish parties. An IPO and listing at the Copenhagen Stock Exchange was expected in the spring of 2008, but was suspended due to the situation of the international financial markets.

In January 2014 the sale of 18% share to New Energy Investment S.a.r.l., a subsidiary of Goldman Sachs, while Danish pension funds, ATP and PFA Pension will acquire 4.9% and 1.8% accordingly. The deal was heavily criticised and caused a split of the ruling coalition of Helle Thorning-Schmidt. On 9 June 2016, some of these shares were sold in an IPO at Copenhagen Stock Exchange.

Oil and gas exploration and production

DONG Energy's primary focus is deep drilling. DONG Energy's core areas of oil and gas exploration and production lay in southern part of the Norwegian North Sea and the Danish part of the North Sea, Barents Sea, west of Shetland, and in the mid Norway (gas production). The reserve base is expected to be 446 million boe. In 2005, DONG Energy acquired 10.34% in the Ormen Lange gas field (operated by Shell). The share of gas reserves allocated to DONG Energy are approximately 40 billion cubic metres (1.4 trillion cubic feet).

DONG Energy owns long pipelines which extend from the Danish part of the North Sea to Nybro and the Swedish gas transmission network (Nova Naturgas). DONG Energy co-owns the Tyra West – F3 pipeline pipelines, which create a link from the North Sea Danish section to the Netherlands natural gas hub in Den Helder, the DEUDAN pipeline from Jutland to north of Hamburg in Germany, and the Langeled pipeline from Nyhamna terminal in Norway to Easington in the UK. DONG Energy owns a share of the Norwegian gas pipeline system. It is also party to the Baltic Gas Interconnector.

Power production

DONG Energy is the largest power producer in Denmark with market shares of 49% for electricity production and 35% for heat production. It also owns power production facilities and projects in Germany, Sweden, The Netherlands, Norway and the United Kingdom.

DONG built and operated the first large scale offshore wind farm in the world, the 160 MW Horns Rev until 2005, and operates the 209 MW Horns Rev 2.

In the United Kingdom DONG Energy operates Barrow and Burbo Bank offshore windfarms and will construct Walney Island and Gunfleet Sands I and II wind farms. In Norway DONG Energy has invested into hydro and wind power.

During 2013 DONG Energy finished the construction of the 400 MW Anholt Offshore Wind Farm off the Danish island of Anholt in the Kattegat at a cost of 10 billion Danish kroner (€1.35 bn). DONG Energy was the only bidder in the process. As of 2012, DONG Energy had a wind turbine capacity of 794 MW and planned to add another 594 MW in 2013.

In 2014 DONG divested its last onshore wind turbines, focusing on offshore wind power, of which DONG had 3,000 MW in 2015; a market share of 16%. DONG surpassed 1,000 offshore wind turbines in 2016.

Dong Energy committed to building the 1,200 MW Hornsea wind farm in January 2016. The expected completion date for the project was 2020.

Carbon intensity

In 2016, DONG was voted number 11 on the Clean200 list.

FTTH

DONG Energy provides FTTH to its customers in northern Zealand. It is offered to the customers as the overhead power lines are buried.

Markets

DONG Energy considers Denmark, Sweden, The Netherlands, United Kingdom and Germany as core markets of corporation.

Netherlands

In a cooperation with Dutch De Nederlandse Energie Maatschappij, Dong Energy wanted to strengthen its position in the Netherlands and in 2007 the company started with the acquisition of a small Dutch energy supplier. However, in 2014 DONG Energy withdrew its consumer activities from the Dutch market.

Other

DONG Energy is main sponsor of the Danish men's national ice hockey team.

DONG Energy is the largest shareholder (51%) of offshore wind turbine installer A2SEA, while Siemens owns the other 49%. DONG Energy also has 30% of subsea cabling installer CT Offshore.

DONG Energy has divested Norwegian power companies Salten and Nordkraft.