MUMBAI� The diversified Reliance Industries group and the Indian government-owned Oil and Natural Gas Corp. (ONGC) are negotiating for Enron Corp.'s 30% equity in the Panna-Mukta and Tapti oil fields in the Bombay basin off western India. The American energy major decided to exit from the unincorporated joint venture formed to develop the two fields.
A process to value the equity stake is underway, as the two remaining partners consider sharing Enron�s equity between themselves. ONGC holds 40% in the venture and Reliance owns 30%. It is unclear whether ONGC or Reliance will operate the fields; previously, Enron was the operator.
Around 34 billion rupees ($740 million) have been invested in the venture so far, with Enron�s own total investment touching 10 billion. Enron is expecting a much higher valuation in view of the recent steep rise in global oil prices.
�Higher valuation of Enron�s stake could pose a problem for ONGC, as the company has always opted for a competitive bidding process before taking such large investment decisions,� a Mumbai-based merchant banker indicated.
Earlier, the three partners had been considering making substantial fresh investments of around 10 billion in the Panna-Mukta and Tapti oil fields. The venture has been looking at increasing oil production to 30,000 b/d from 25,000, and gas production to 3 million cu m/day from 2.5 million cu m/day.
