World’s Biggest Wind Turbine Maker just sold off its last Oil Company making the country’s economy oil-free
The petroleum industry is heading to the end of its era, Denmark is selling off its biggest oil company in transition to wind power as the world’s top wind turbine-producing nation transitions to renewable energy.
Denmark’s has inked a deal to sell its biggest remaining oil firm for the total worth of $7.45 billion. However, revenues made from Danish oil still play an essential role in its transition to wind power.
Danish Transport, logistics conglomerate and Shipping Company A.P. Moller-Maersk last week announced the sale of its Oil & Gas division to French energy giant Total S.A – a French multinational oil company.
Maersk had been drilling for oil and gas in the North Sea since 1962. The separation of Maersk’s oil and gas division follows a new strategy, announced last fall, which re-focuses on shipping in order to “create an integrated transport & logistics company.”
Maersk’s move to divest its oil business was welcomed by the government and trade unions alike. But it’s all not as clear-cut as it may sound: Total will pay Maersk $4.95 billion in its own stock (a 3,8 percent stake in the company) and assume about $2.5 billion of debt – meaning that Maersk remains indirectly exposed to oil revenue.
“By selling to Total, we ensure a continued Danish stronghold in the North Sea based on Maersk Oil’s leading position within technology development and its track record as a lean, efficient and trusted partner,” Claus V. Hemmingsen, Maersk’s vice chief executive, said in a statement.
“Importantly, Maersk Oil will remain close to its technology and innovation partners at the Danish technical institutions and in the oil and gas service industry to the benefit of all parties”, he added.
Just three months ago, Dong Energy sold off its oil and gas interests to chemicals group INEOS for $1.3 billion. Dong is Denmark’s largest energy company, and is currently leading the charge to implement offshore wind farms across Europe and in the United States.
Winds of Change
Wind power has become increasingly viable in recent years, and countries with expansive coastal areas are investing heavily in offshore farms. This practice is proving to be particularly popular among Scandinavian countries.
Denmark in particular is going all-in on wind power. The country set a world record by sourcing almost half of the electricity it used throughout 2015 from wind turbines, and in March 2017, it managed to rely solely on wind energy for an entire day.
However, things are also changing in the United States. In March, the Southwest Power Pool produced more than half of its energy from wind for a short time — a record that was promptly broken in May by the California Independent System Operator.