By the OGJ Online Staff
LONDON, Jan. 9 -- London financial analysts think Italy's ENI SPA and Royal Dutch/Shell Group are the most likely suitors for British independent oil producer Enterprise Oil PLC, which has confirmed that it has recently received and rejected an unsolicited offer from another firm.
ENI has a joint venture with Enterprise onshore southern Italy. Shell recently said that it has funds available to add assets to its portfolio.
Acquiring oil and gas assets by takeover has become cheaper than finding and developing new reserves as world economic conditions have depressed energy sector share prices in recent months.
ENI declined to comment, but CEO Vittorio Mincato said last week the Italian firm "would not allow opportunities on the market to escape." It has already taken over UK independents British Borneo Ltd. and LASMO Ltd.
Enterprise is attractive to larger companies because most of its production is in developed countries, allowing it to avoid some of the political risk affecting companies with interests in the Middle East or South America. It has proven and probable reserves of 1.41 billion boe and operates fields in Italy, Norway, Denmark, Britain, and the Gulf of Mexico.
Enterprise was created in 1983 from assets that the UK government ordered BG Group PLC 's predecessor, British Gas, to sell when the state-owned gas monopoly was privatized.
BG Group could also emerge as a bidder for Enterprise, reclaiming producing fields which it originally discovered. Canada's Talisman Energy Ltd. is also being suggested as a bidder, but none of the companies involved in bid speculation has commented.
Enterprise would be a strategic fit with ENI because of their close involvement in the Val D'Agri project in Italy where three fields, Monte Alpi, Monte Enoc, and Cerro Falcone (located respectively in the Grumento Nova, Caldarosa, and Volturino concessions) are under development.
Development of the three fields includes the drilling of 42 production wells, 21 of which have already been completed and 4 have started production. The oil treatment facilities for the fields are being increased from 9,000 b/d to 104,000 b/d. Natural gas treatment capacity is expected to reach 3 million cu m/d.
The project also involves a 136-km, 20-in. pipeline to the Taranto marine terminal. Construction contracts for the pipeline have been awarded and work started.
Recoverable reserves in the Val d'Agri fields are 318 MMboe.