Enron Oil to sell Cambay stake

Sources disclosed that CSFB has also informed that the private auction of Enron’s holdings would take place in two phases. In the first phase, the interested parties would submit a non-binding indication of the cash purchase to be paid to EOGIL.

In the second phase, selected number of parties will be invited to participate. Enron holds 30 per cent stake each in Mukta and Panna oil fields along with Tapti gas field.

Global competitive bids for the sale of its 30 per cent stake in Panna, Mukta and Tapti oil fields will be invited in April next. CSFB, currently doing the valuation of Enron’s stake in the fields, will submit its report by March 2001.

Officials disclosed that even the Indian Oil Corporation (IOC) has decided to participate in the bidding process. On being contacted, IOC sources confirmed that the corporation was contemplating of participating in the bidding process.

On the other hand, after EOGIL announced its withdrawal from gas and oil operations in the country on October 18, both Reliance and ONGC evinced interest in picking up its stake, as this would increase their stake in the venture.

Asked if Enron could exit from Panna-Mukta-Tapti fields without completing the development plan, officials informed that Enron has the right to assign their interest with government’s approval at any stage.

"The sale/assignment provisions in the contracts are internationally acceptable norms to facilitate investors’ exit and entry in the contract to choose their business preferences/options. Even our national oil companies like ONGC Videsh Ltd has acquired interests in the contracts as well as they have sold interest in fields in Vietnam," officials said.

Article 28.1 of the contract clearly says that “A joint venture partner may assign or transfer a part or all of its interest with the prior written consent of the government.”

Enron has informed the government that as part of its business strategy, the company is divesting its exploration and production assets.

Officials said that Enron’s withdrawal will not have any impact on the development and production operations and in accordance with the provisions of the contract on assignment, the government would take care of the fact that the company which comes in place of Enron has the capability to perform development and production operations.

The joint venture trio of Reliance, ONGC and EOGIL has invested $496.10 million till date, the sources said. The recoverable reserves for Panna-Mukta field is 58.27 million metric tonne.