May 24 (UPI) -- British petrochemicals company INEOS said Wednesday it built up its oil and gas business with a $1 billion purchase of assets from DONG Energy.
INEOS announced the unconditional payment for the entire portfolio held by the oil and gas subsidiary of DONG. With the $1 billion acquisition, INEOS becomes a top tier North Sea oil and gas player and the largest privately owned exploration and production company in the region.
"DONG Energy's oil and gas Business is a natural fit for INEOS as we continue to expand our upstream interests," INEOS Chairman Jim Ratcliffe said in a statement. "We have been successful in our petro-chemical businesses, focusing on operating our assets safely, efficiently and reliably and we intend to do the same with our oil and gas assets."
In late October, DONG Energy said it was moving its portfolio away from oil and gas and closer to clean-energy options like bioenergy and offshore wind.
DONG has seven offshore wind farms in various stages of construction. The assets acquired by INEOS include about 570 million barrels of oil and natural gas reserves in the North Sea.
DONG Energy CEO Henrik Poulsen said the agreement with INEOS is transformative to a company stepping away from the oil and gas business.
"The transaction completes the transformation of DONG Energy into a leading, pure play renewables company," he said in a statement.
For INEOS, the transaction follows a string of moves deeper into the oil and gas business. In April, the company paid about a quarter billion dollars to acquire the 235-mile Forties pipeline system, which ties 85 oil and gas assets in the North Sea to the British mainland. Late last year, the company became the largest shale gas acreage holder in the country when it was awarded 21 licenses by the British government.
The North Sea acquisition followed an announcement from BP that it started oil production from a North Sea basin after spending billions of dollars on regional redevelopment. Working under the Quad 204 redevelopment effort, the company said the program could yield another 450 million barrels from regional assets under maturation pressure.