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News // Crime

Enron India Oil, Gas Assets Buy Talk «Speculative»

07 November 2001 , 11:06468
We wouldn't comment on market speculation," said S. Ravi, Shell's corporate spokesman in India.

The New Delhi-based managing director of Shell India Production Development BV - Shell's oil and gas exploration division in the country - also declined to comment on the matter when contacted by Dow Jones Newswires. He reiterated that the industry talk was "speculative."

Industry sources have said Shell has expressed an interest in acquiring Enron India's upstream assets and held informal talks with BG's unit in New Delhi at the end of October to discuss the matter.

BG paid US$388 million for Enron's 30% stake in oil and gas fields offshore western India in October, but the sale is subject to a number of consents and conditions including confirmation from Enron and Gas India's joint venture partners - Oil & Natural Gas Corp. (P.ONG) and Reliance Industries Ltd. (P.REL) - that BG will inherit field operator status from Enron.

ONGC and Reliance Industries are challenging BG's goal of acquiring Enron's operatorship of the offshore Tapti gas field and the Panna/Mukti oil and gas field. As reported Thursday, BG said it will extend the negotiation period on the operatorship of the fields indefinitely.

The company has threatened to walk away from the deal if it didn't win outright operatorship.

"Shell are willing to enter if BG walk out - they're standing in line," an industry source said. He added Shell was amenable to a joint-partnership, implying it was flexible on the issue of operator status.

Another source added, "Global developments indicate that Shell may take over (the Indian upstream assets of) Enron, and that may change the equation in India."

Analysts say BG's bid for operator status will continue to face stiff resistance from ONGC and Reliance. Enron's upstream oil and gas assets in India hold proven and probable reserves of around 170 million barrels of oil equivalent.

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