ONGC to bid for Enron stake in a week

ONGC to bid for Enron stake in a week
DEV CHATTERJEE

MUMBAI, JAN 12: Public sector giant Oil & Natural Gas Corporation Ltd (ONGC) will be making a bid for Enron's 30 per cent stake in a three-way joint venture in a week. Reliance Industries Ltd (RIL), the third partner in the JV, is also expected to make its bid for the oil exploration and production company.

As part of its world-wide policy, Houston-based Enron Corp had decided to sell its stake in the oil exploration business. In India too, the company had a presence through a joint venture in which Reliance and Enron had equal partnership while ONGC had a 40 per cent stake. The JV was producing oil from the Tapti and Panna-Mukta fields.

``ONGC will make the non-binding preliminary bid next week. If that is accepted by Enron, the Corporation will make the final bid on its own,'' chairman of ONGC Bikash C Bora said here today.

``None of the partners had the first right of refusal... if Enron wants it can sell its stake to any other party,'' Bora added. ``But we are confident that we will do better,'' he added.

However, Petroleum Minister Ram Naik said Enron will have to take permission from the government of India before selling its stake to any outside partner. ``It was a licence granted by the GoI. The oil fields have been discovered which make it an attractive proposition for any oil company to invest. But as the licence issuing party, we will take into account the national interest as well as ONGC's interest before allowing Enron to sell its stake to any outside party,'' Naik said.

Officials said that ONGC has appointed an in-house committee to value the Enron joint venture to make the financial bid. ``We are competing with some of the best companies in the oil industry for Enron's stake including Reliance. It is, therefore, necessary for us to keep in mind the richness of these oil fields where most of the preliminary work has been already down,'' ONGC officials told this newspaper.

The oil fields were initially developed by ONGC after which the RIL-Enron consortium entered the picture more than five years ago. ONGC had spent over Rs 650 crore for its efforts. Other than Indian oil sector majors, Hindustan Petroleum and Bharat Petroleum, multinationals like Marathon, Premier Oil, Shell, Petrobras, Exxon-Mobil and TotalFinaElf are also interested in Enron's stake though none of companies had said so officially. The Panna-Mukta and Tapti fields have the potential to produce over 300 million cubic metres of gas and 29,000 barrels of oil daily.