Moller-Maersk, DONG Energy in talks to merge oil and gas business

A P Moller-Maersk and DONG Energy are in talks to merge their oil and gas operations in a deal that would create a company valued at over $8.7 billion, British newspaper CITY AM reported.

Both the Denmark-based companies A P Moller-Maersk and Dong Energy have hired Bank of America and JP Morgan respectively to work on a possible merger of their oil businesses.

The talks comes after Moller-Maersk said in September that it would split its transportation and oil businesses, or sell off its oil business to focus on its core transport operations.

A spokesman for Dong Energy told Reuters "We are in the very early stages of the sales process. There will be no sale before the end of the year and it is far too early to speculate over timing and indeed potential buyers."

Dong Energy, Denmark's largest energy company, had this month said that it would divest its oil and gas assets as part of its plan to shift from fossil fuels toward offshore wind.

Maersk produces over 600,000 barrels of oil a day, while Dong Energy produces about 115,000 barrels a day. Both companies have a majority of their assets in the North Sea.

Earlier Maersk had held inconclusive talks on acquiring some North Sea assets of Royal Dutch Shell.

Dong Energy's oil and gas portfolio includes 14 in Denmark, 19 in the UK (West for Shetland), 23 in Norway, 2 in the Faroe Islands and 1 near Greenland.

Moller-Maersk produces oil from the Danish and UK sections of the North Sea, Qatar, Algeria and Kazakhstan.