OSLO, July 6 (Reuters) - Norway’s oil and gas firm Equinor is acquiring Danish power and natural gas trading firm Danske Commodities (DC) for 400 million euros ($468 million), it said on Friday.
The transaction supports Equinor’s strategy to move from being an upstream oil and gas company to becoming a broad energy company, and follows similar deals by its peers in Europe.
“Danske Commodities’ trading platform and geographic footprint will support our strategy through leveraging DC’s material trading position in electricity and natural gas,” Jens Oekland, Equinor’s head of marketing, midstream and processing, said in a statement.
Last year, DC traded 318 terawatt-hours (TWh) of electricity across 37 countries and 389 TWh of natural gas across 18 countries, or about one third of Norway’s annual gas production, Equinor said.
“Strategically, we believe, the acquisition makes sense. Having an in-house electricity trading division will probably contribute to optimize sales of Equinor’s increasing electricity production...,” analysts at Sparebank 1 Markets said in a note.
Equinor has invested in a few operating and planned offshore wind parks off Britain and Germany.
Spanish oil firm Repsol in June acquired power utility firm Viesgo for 750 million euros, including its gas and electricity marketing business.
French oil major Total in April bought a majority stake in electricity retailer Direct Energie in a 1.4 billion euro deal, making it a major competitor for top French power utility EDF.
Oil and gas firms are under increasing pressure from shareholders and environmentalists to reduce carbon emissions from petroleum operations to help limit global warming.
Meanwhile, demand for electricity is expected to rise sharply due to electrification of the transport fleet and increased use of electric appliances, the International Energy Agency said in its latest global energy outlook.
Global investment in electricity overtook that of oil and gas for the first time in 2016, it added.
Equinor, formerly known as Statoil, has pledged to invest 15-20 percent of its capital expenditure in “new energy solutions”, including renewable energy, by 2030.
The company has said its investments in new energy solutions were in the region of $500-750 million or 5-8 percent of a total capex of $9.4 billion in 2017. ($1 = 0.8545 euros) (Reporting by Nerijus Adomaitis; Editing by Elaine Hardcastle)