Enron picks ONGC for stake sale

Enron picks ONGC for stake sale
AGENCIES

NEW DELHI, FEB 4: US-based energy company Enron International has shortlisted Oil and Natural Gas Corporation (ONGC) for acquiring its 30 per cent stake in Panna-Mukta and Tapti Oil and gas fields, but the fate of Indian Oil Corporation (IOC) was unknown.

While acceptance of ONGC’s initial non-binding bid for Enron’s stake in the oil and gas fields in Gujarat and Mumbai offshore region has been acknowledged with an acceptance letter, IOC was yet to receive any of it.

“Our bid for Enron Oil and Gas India Ltd (EOGIL’s) stake has been accepted and we have been asked to submit a detailed financial bid,” ONGC chairman and managing director Bikash C Bora told PTI. M A Pathan, chairman, IOC, on the other hand, said “we submitted a non-binding bid in the form of expression of interest (EoI) to global consultants Credit Suisse First Boston, but haven’t received any communication so far.”

Others in contention for Enron’s stake in the oil and gas fields which produce around 300 million cubic metres of gas and 29,000 barrels of oil per day, are Reliance Industries and Royal Dutch Shell.

Sources said both Reliance and Shell have made EoIs but Cairn Energy, which was earlier reported to have evoked interest in the fields, had not made any formal bid. EOGIL, which is the operator of the $900 million joint venture with Reliance and ONGC who hold 30 and 40 per cent stake respectively, had in October sought government permission in October to withdraw from the oil and gas field as part of its asset rebalancing exercise.

Bora said ONGC had hired merchant banker N M Rothschild India as its consultant for the two-stage bidding process comprising non-binding EoI and a detailed financial bid from the shortlisted companies. Acceptance of non-binding bid would provide ONGC access to Enron’s data on the oil and gas field, based on which the company would be making the final bid, he said.

“Though Enron has not yet specified any deadline for submitting the financial bid, it is hoping to complete the transaction during the current fiscal,” Bora said adding Enron would have to inform and seek approval of the government for the transfer of its assets to the selected buyer.

As per JV agreement, EOGIL would need government nod on the prospective buyer though production sharing contract did not provide for first right of refusal to other partners.