Equinor's Danish Trader Purchase 'Ticks all the Boxes': VP
Norwegian Equinor has bought specialist Danish energy company Danske Commodities for €400mn – with a little more cash to come, depending on how it performs. NGW spoke to Equinor’s executive vice-president for marketing, midstream and processing Tor Martin Anfinnsen July 6 when the deal was announced (below, right, with DC CEO Henrik Lind on the left).
Anfinnsen was on his way back from DC’s office in Aarhus where he had been welcoming the new colleagues, before visiting the London and Stavanger offices to talk more about the deal. There will be no wholesale integration of the trading desks, he said by phone from the airport. Lind will continue to lead the business for at least 12 months after the transaction closes and senior management will remain in place.
Anfinnsen added: "The transaction supports our direction as an energy company: we need to grow our new energy solutions (NES), our renewable power portfolio and to be involved in the whole electricity value chain, and we are not present there in any serious way.
“DC’s culture is very similar and fits with ours, and they will develop our understanding of power markets. Their approach to digitalisation is also very advanced. They are at the forefront of bot trading, they use artificial intelligence extensively.
“And they are very nimble in the very short term gas market and experts in it, and we want them to retain that. Our marketing and trading stems from being a big upstream player and we want to realise the full market value of production. There is much more complementarity than there is overlap.
"Our power trading operation is rather small and we have had for some time needed to expand our capacity in that space, especially in view of our very ambitious targets for capex allocated to NES. We will spend a lot, we firmly believe in the whole value chain. It is no longer enough to build wind farms and hand the value over to someone else. Subsidies are over in Europe, so we have to be competitive; and DC will add value through its trading competency."
DC was founded in 2004 and has 284 employees. In 2017 it traded 318 TWh of electricity in 37 countries, double Norway’s annual electricity demand; and 389 TWh (36.2bn m3) of gas across 18 countries, equivalent to around one third of total Norwegian gas production. It executes more than 4,000 trades and processes on average 173 terabytes of data every day of the year.