DONG Energy

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DONG Energy
State
Traded as Nasdaq CopenhagenDENERG
Industry Oil and gas
Electricity generation
Predecessor Dansk Naturgas A/S
Elsam
Energi E2
NESA
Københavns Energi
Frederiksberg Forsyning
Founded 2006 (2006)
Headquarters Fredericia, Denmark
Key people
Henrik Poulsen (CEO)[1]
Fritz Schur (Chairman)
Products Natural gas
Oil
Electricity
Services Gas distribution, Oil and Gas exploration and drilling
Revenue 54.598 billion DKK (2010)[2]
Increase 18.5 billion DKK (2015) [2]
Decrease (12.1) billion DKK (loss) (2015) [2]
Number of employees
6,700 (2015)[3]
Website www.dongenergy.com

DONG Energy (former names: Dansk Naturgas and Dansk Olie og Naturgas (abbreviated as DONG)) is an integrated energy company based in Fredericia, Denmark. It is Denmark's largest energy company .

History[edit]

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 2000s (decade), 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 EU 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.[4] 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.[5]

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&gas supplies about half of DONGs income, while offshore wind turbines supplies near the other half.[6]

Shareholders[edit]

The majority (76%) of DONG Energy is owned by the Danish Government. The rest of the shares are owned by SEAS-NVE (11%), Syd Energi (7%) and (6%) owned by smaller shareholders. 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.[7]

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.[8] On 9 June 2016, some of these shares were sold in an IPO at Copenhagen Stock Exchange.[9]

Activities[edit]

Oil and gas exploration and production[edit]

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 gas pipelines 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[edit]

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,[10][11][12] and operates the 209 MW Horns Rev 2.[13][14]

In the United Kingdom DONG Energy operates Barrow and Burbo Bank offshore windfarms and will construct Walney Island and Gunfleet Sands I and II[15] wind farms.[16] In Norway DONG Energy has invested into hydro and wind power.[17]

During 2013 DONG Energy will finish the construction of a 400MW 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.[18][19][20] As of 2012, DONG Energy has a wind turbine capacity of 794 MW and plans to add another 594 MW in 2013.[21]

In 2014 DONG divested its last onshore wind turbines, focusing on offshore wind power,[22] of which DONG had 3,000 MW in 2015.[23]

Dong Energy committed to building the 1,200 MW Hornsea wind farm in January 2016. The expected completion date for the project was 2020.[24][25]

Carbon intensity[edit]

Year Production (TWh) Emission (Gt CO2) kg CO2/MWh
2002 16 6 375
2003 18 6.07 337
2004 18 4.95 280
2005 13 1.67 126
2006 18 4.73 264
2007 17 4.25 250
2008 22 2.92 131
2009 22 2.88 131

In 2016, DONG was voted number 11 on the Clean200 list.[26][27]

FTTH[edit]

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

Markets[edit]

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

Netherlands[edit]

In a cooperation with Dutch De Nederlandse Energie Maatschappij, Dong Energy wanted to strengthen its position in the Netherlands[28] and in 2007 the company started with the acquisition of a small Dutch energy supplier.[29] However, in 2014 DONG Energy withdrew its consumer activities from the Dutch market.[30][31]

Other[edit]

DONG Energy is headsponsor for the Danish men's national ice hockey team

DONG Energy has signed a deal with Project Better Place regarding the mass introduction of electric cars in Denmark. That deal is called into question however, as the contractual partner went into bankruptcy in 2013.[32]

DONG Energy owns 51% of offshore wind turbine installer A2SEA,[33] while Siemens owns the other 49%.[34] DONG Energy also has 30% of subsea cabling installer CT Offshore[35]

DONG Energy has divested Norwegian power companies Salten and Nordkraft.[36]

See also[edit]

References[edit]

  1. ^ Wichmann, Sonny (18 April 2012). "Henrik Poulsen bliver ny topchef i DONG" (in Danish). business.dk. Retrieved 18 April 2012. 
  2. ^ a b c "Company announcement - annual report 2015" (PDF). DONG Energy A/S. 4 February 2016. 
  3. ^ "About us". DONG Energy A/S. 
  4. ^ Copenhagen Newsroom and Karolin Schaps (10 September 2013). "DONG sells link to world's largest wind farm for $728 million". Reuters. 
  5. ^ Levring, Peter; Wienberg, Christian (6 February 2014). "In Denmark, Goldman Sachs Deal Ignites Political Crisis". Bloomberg Businessweek. Retrieved 12 February 2014. 
  6. ^ http://www.business.dk/energi/dong-leverer-det-stoerste-underskud-i-danmarkshistorien
  7. ^ "IPO and listing on the OMX Nordic Exchange Copenhagen" (Press release). DONG Energy. 8 January 2008. Retrieved 31 January 2014. 
  8. ^ Levring, Peter; Wienberg, Christian (30 January 2014). "Goldman Deal on Danish Energy Splits Copenhagen Coalition". Bloomberg. Retrieved 31 January 2014. 
  9. ^ Nasdaq Copenhagen Welcomes DONG Energy To List On Its Main Market, GlobeNewswire.
  10. ^ Horns Rev I Offshore Wind Farm, Denmark Power Technology. Retrieved: 27 October 2010.
  11. ^ Horns Rev 1 (Denmark) offshore wind farm 4C . Retrieved: 30 July 2010.
  12. ^ Horns Revolution Archived 14 July 2011 at the Wayback Machine., Modern Power Systems, 5 October 2002, accessed 14 April 2010.
  13. ^ Horns Rev 2 (Denmark) offshore wind farm 4C . Retrieved: 30 July 2010.
  14. ^ Horns Rev 2 LORC . Accessed: 10 December 2011.
  15. ^ Gunfleet Sands offshore wind farm (United Kingdom) 4C . Retrieved: 27 October 2010.
  16. ^ "DONG Energy Invests in UK Offshore Wind Farms". Oil Voice. 3 December 2007. Retrieved 16 December 2007. 
  17. ^ "DONG Energy Increases Stake in Norwegian Hydropower". Oil Voice. 7 December 2007. Retrieved 16 December 2007. 
  18. ^ Bjartnes, Anders (22 June 2010). "Dong gets green light for 400MW Anholt despite high prices". Recharge. Retrieved 23 June 2010. 
  19. ^ Hanne, Windemuller. Anholt Offshore Wind Farm will be the largest in Denmark Danish Energy Agency, 2 July 2010. Accessed: 27 November 2010.
  20. ^ Anholt Offshore Wind Farm
  21. ^ Wittrup, Sanne (1 November 2012). "Dong Energy øger vindkraften med 75 procent i 2013". Ingeniøren. Retrieved 1 November 2012. 
  22. ^ Fribo, Adam. "Dong sælger de sidste landmøller" Ingeniøren, 23 December 2014. Accessed: 24 December 2014.
  23. ^ Dong runder 3000 MW havmøllekapacitet Archived 22 May 2015 at the Wayback Machine.
  24. ^ "Dong commits to Hornsea build", renews.biz, 3 February 2016 
  25. ^ World’s largest offshore wind farm to be built in the UK (press release), Department of Energy and Climate Change, 3 February 2016 
  26. ^ "Toyota, Tesla and Vestas ranked among world's top green companies". The Guardian. UK. 2016-08-15. Retrieved 2016-09-05. 
  27. ^ http://static1.squarespace.com/static/579bd6e8414fb5125750d050/t/57b1ea14d482e94594339e47/1471277588692/Clean200_Q3-16_AYS%2BCK_20160815.pdf
  28. ^ "DONG Energy strengthens its position in the Netherlands". 
  29. ^ "'Nederland is voor ons geen speeltuintje'". 23 June 2007. 
  30. ^ "Eneco neemt klanten en medewerkers over van DONG Energy Sales B.V.". 21 January 2014. 
  31. ^ "Dong Energy siger farvel til skidt investering". 21 January 2014. 
  32. ^ Metro - Dansk elbilspark ska tankas med vindkraft
  33. ^ "Siemens catches wind with A2Sea move". Upstream Online. NHST Media Group. 29 June 2010. Retrieved 16 November 2010. 
  34. ^ Antitrust authority approves Siemens as equity partner in A2SEA DONG Energy, 13 October 2010. Retrieved: 16 November 2010.
  35. ^ DONG becomes co-owner of CT (in Danish) Maritime Denmark, 12 November 2010. Retrieved: 16 November 2010.
  36. ^ Divestment of stakes in Nordkraft and Salten Kraftsamband has been approved DONG Energy, 12 October 2010. Retrieved: 16 November 2010.

External links[edit]

External image
Map of DONG activities