Dong CEO Says Unclear Oil Unit Strategically Important

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Dong Energy A/S may no longer have a strategic need to own an oil and gas unit, Chief Executive Officer Henrik Poulsen said in an interview.

The utility, which Goldman Sachs Group Inc. bought an 18 percent stake in last year, has traditionally used its North Sea oil and gas output to counter the risk of price swings in its thermal power operations. But that hedge is becoming less important as Dong builds up its offshore wind business.

“I’m not sure it’s strategically important but it’s providing operational gains,” Poulsen said in a phone interview on Wednesday. “The market reality is quite new after oil prices dropped to half their level 12 months ago.”

Dong’s owners, which include the Danish state, Goldman Sachs, local energy companies and pension funds ATP and PFA A/S, are due to present a plan on how to ready the company for an initial public offering set to take place by 2018.

(Corrects period in third paragraph.)

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