Reliance, ONGC eye Enron stake in Panna-Mukta oil fields

The diversified Reliance Industries group and the Indian government-owned Oil and Natural Gas Corp. 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.


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.

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