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Enron Mail |
Online college library and research firm slows pace, reduces staff by almost
half Houston Chronicle, 05/09/01 Markets / Your Money Mixed Day Waiting for Fed's Act Wall St.: The Dow falls 51.66 points to 10,883.51, with Nasdaq rising 25.20 to 2,198.77. Long-term yields rise on below-par productivity report. Los Angeles Times, 05/09/01 JAPAN: Japan power market not fair for newcomers-Enron. Reuters English News Service, 05/09/01 Enron Official: Japan Needs Independent Power Regulator Dow Jones International News, 05/09/01 UK: INTERVIEW-U.S. Williams enters Europe energy markets. Reuters English News Service, 05/09/01 INDIA: Enron moves execs families out of India - paper. Reuters English News Service, 05/09/01 India: Dabhol: MSEB denies capacity underutilisation Business Line (The Hindu), 05/09/01 NO PRESSURE FROM INDIAN FEDERAL GOVT ON ENRON ISSUE: MSEB Asia Pulse, 05/09/01 MSEB ropes in HC judge as arbitrator The Economic Times, 05/09/01 SJM demands probe into Enron deal The Times of India, 05/09/01 Plans for more power from Uran unlikely: MSEB The Times of India, 05/09/01 Enron: Preparing for pull out? The Times of India, 05/09/01 Dabhol lenders willing to back PPA termination Business Standard, 05/09/01 Prize Petroleum eyes Enron stake in Panna, Mukta Business Standard, 05/09/01 May 9, 2001 Houston Chronicle Online college library and research firm slows pace, reduces staff by almost half By TOM FOWLER Copyright 2001 Houston Chronicle Questia Media laid off half of its work force Tuesday in an effort to reduce costs. The developer of an online library and research site for college students cut 139 jobs as it begins to slow down the pace at which books are added to the site. Founder Troy Williams said the company is finding it too hard to raise enough additional cash from investors to justify the pace at which it was adding books. "Customers have said they're generally satisfied with the number of books that are on the site right now, so it's a good time to slow down," Williams said of the 35,000 books currently available. "A significant number of our people were involved in that process." At one time, Questia employed more than 300 workers but cut back to about 280 in recent weeks. The layoffs will leave the staff at about 140. No senior vice presidents are leaving as part of the layoffs, but Williams said a number of vice presidents and director-level employees have been cut. Laid-off employees will receive eight weeks of pay and 60 days of benefits, Williams said. "We've tried to be as humane as we could about the whole thing," Williams said. Williams said Questia's layoffs are not a result of the company growing too large too fast. "It took that many people to launch the service," Williams said. "But since we're not digitizing books that quickly, we just don't need that many." Questia was started in 1998 by Williams with the backing of investors such as Compaq Computer Corp. co-founder Rod Canion and Enron Chairman Ken Lay. The company raised more than $135 million over the past two years to build an online searching and note-taking interface and so far has purchased the rights to digitize more than 60,000 books. The company charges students about $20 per month for unlimited access and pays publishers based on the number of page views their books get from students. The site went live in early January but had trouble attracting the number of subscribers the company originally hoped for. In early April, following an intense television ad blitz during the National Collegiate Athletic Association's men's basketball tournament, the company had slightly more than of 1,000 paying subscribers, sources close to the company say. Company officials always said building the subscriber base would be an expensive long-term project. Several adjustments in strategy over the 14 weeks since the service launched indicate the original plans weren't panning out. On-campus membership drives were shifted first from community colleges to a handful of large major universities, a television ad campaign was launched months earlier than expected, while an early mascot was pushed into the background in favor of a simpler marketing message. The changes in strategy appear to be paying off as subscribership has jumped significantly in recent weeks. Williams wouldn't discuss the numbers, but sources say that figure has topped 5,000. "We've had a fivefold increase in the number of paying subscribers in the past two weeks alone, which is a significant proof point in students' willingness to pay for such a service," Williams said. The company has offered the service free to nearly 100,000 students and faculty at four universities in recent weeks, an effort that is expected to bear fruit in new subscribers next fall. With current subscriber growth projections, he said the company is expected to have a positive cash flow in about 18 months. Questia is expected to close on another round of funding from a group of investors in several weeks. "We're very sanguine about the future," Williams said. "We have to buckle down over the summer. We're a very cyclical business, so we're not going to make great strides over the summer." Business; Financial Desk Markets / Your Money Mixed Day Waiting for Fed's Act Wall St.: The Dow falls 51.66 points to 10,883.51, with Nasdaq rising 25.20 to 2,198.77. Long-term yields rise on below-par productivity report. From Times Staff and Wire Reports 05/09/2001 Los Angeles Times Home Edition C-4 Copyright 2001 / The Times Mirror Company Key indexes finished mixed Tuesday but more stocks rose than fell as Wall Street struggled for direction ahead of the Federal Reserve's meeting next week. In the bond market short-term yields fell further, and long-term yields inched up after the government's disappointing report on first-quarter worker productivity. The Dow Jones industrials eased 51.66 points, or 0.5%, to 10,883.51, the fourth loss in five sessions, as the 11,000 mark again proves to be a barrier for the blue-chip index. But the Nasdaq composite index rose 25.20 points, or 1.2%, to 2,198.77 as semiconductor and computer networking stocks rose ahead of Cisco Systems' quarterly earnings report, released after regular trading ended. Cisco's operating results slightly beat estimates, but the company reported a massive net loss as it wrote down the value of excess inventory. Cisco shares, which rallied $1.13 to $20.38 in regular trading, fell to $19.90 in after-hours activity. In the broad market Tuesday, winners edged losers by 21 to 17 on Nasdaq and by 16 to 14 on the New York Stock Exchange. Trading volume was moderate. Some analysts were impressed by the market's strength, especially in the wake of the downbeat productivity report. The government said worker productivity fell at a 0.1% rate in the first quarter, the first decline in five years. The report, though not entirely unexpected, raised fears about inflationary pressures in the economy. Productivity gains had helped hold inflation to a minimum in the late 1990s. Long-term Treasury bond yields rose modestly Tuesday as traders registered their concern about inflation's trend. The 10-year T-note yield ended at 5.24%, up from 5.19% Monday. But shorter-term yields continued to slide as traders bet that the Fed, which meets Tuesday, will cut its key short-term lending rate for a fifth time this year. The six-month T-bill yield slid to a new two-year low of 3.69% from 3.72% Monday. Though the central bank may lower short-term rates further, the productivity report "increases the likelihood that the Fed will have to reverse course next year," raising rates to contain inflation, Henry Willmore, chief U.S. economist at Barclays Capital, told Bloomberg News. Among Tuesday's market highlights: * Financial stocks remained under pressure on concerns about loan losses and weaker borrowing in the struggling economy. American Express fell $1.93 to $41.30 after Morgan Stanley downgraded the stock. J.P. Morgan Chase fell $1.45 to $47.75, Bank One lost 94 cents to $37.46 and Northern Trust fell $1.49 to $64.71. * Chip stocks were strong, led by PMC-Sierra, up $4.79 to $44.10; Vitesse Semiconductor, up $2.60 to $36.25; and Broadcom, up $2.24 to $44.53. But among personal computer stocks, Dell lost $1.08 to $24.83 after announcing new job cuts. Dell rival Compaq fell 27 cents to $16.83 and Apple Computer eased 39 cents to $24.57. * Among blue chips, 3M fell $1.54 to $116.36. Chief Executive James McNerney said at 3M's annual meeting that there are "no signs" the global economy will turn around any time soon. * Utility and energy-trading stocks were weak. Enron fell $1.93 to $56.11, Orion Power lost $1.04 to $28.76 and NRG Energy fell $1.64 to $31.07. * Market Roundup: C7, C8 GRAPHIC-CHART: Daily Diary: Tuesday, May 8, 2001; Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. JAPAN: Japan power market not fair for newcomers-Enron. 05/09/2001 Reuters English News Service (C) Reuters Limited 2001. TOKYO, May 9 (Reuters) - U.S. energy giant Enron Corp said on Wednesday that Japan's newly deregulated power market lacked competition and contained barriers that were deterring new entrants. "There's no real competition in the power market," Nicholas J.O'Day, vice president of Enron Japan Corp told reporters. A number of unnecessary regulations, the high costs of the transmission network and other factors have thwarted attempts by newcomers to enter the power market, he said, adding that more reforms were needed. New entrants have to borrow the transmission network system from power utilities when they try to enter the market, but it was hard to judge whether the transmission fees reflect real costs, he said. Since March last year, non-utility firms have been allowed to begin supplying power to large-lot commercial users, ending a monopoly by Japan's 10 power utilities. The move was aimed at lowering electricity rates, which are much higher than in most Western economies. Yet the ratio of newcomers in the power market now stands at at only 0.2 percent of the total. Enron also said that it would be necessary for Japan to set up an independent regulator to promote more competition in the power market. "It's OK if the Ministry of Economy, Trade and Industry (METT) could act as a regulator," he said, but added that METI's traditional relationship with power utilities may prevent it from being a fair regulator. Enron, North America's biggest buyer and seller of electricity, set up its first joint venture in Japan in 1999, named "E Power". Enron Japan itself was set up last May. In March, Enron presented plans to build a liquefied natural gas (LNG) fired power plant in northern Japan, aiming to become the first foreign company to build such a plant in Japan. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron Official: Japan Needs Independent Power Regulator 05/09/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) TOKYO -(Dow Jones)- Japan's power industry needs a strong independent regulator in order to become truly competitive, an Enron Japan Corp. official said Wednesday. "Japan is in a new global environment now. It requires new structures for its economy," said Nicholas J. O'Day, vice president at Enron Japan, a wholly-owned subsidiary of the Houston-based Enron Corp. (ENE). While he said that the existing Ministry of Economy, Trade and Industry might rise to fill the role, he expressed concerns that the ministry would be able to serve an impartial role given the historical relationship between it and the incumbent utilities. That relationship might make it difficult for the ministry to objectively treat new entrants to the power field, he said. Launched in April 2000, Enron Japan is focusing its business on areas such as electricity trading and marketing, and trading in weather derivatives, nonferrous metals and financial products. It has also said it plans to introduce broadband services in Japan. "Contrary to popular belief, Enron is not out to destroy the existing Japan utilities," O'Day said. Rather, he said, Enron maintains that increased liquidity is a vital factor to bring about a competitive environment. Enron is basing its conclusions on a report by U.S.-based Brattle Group, O'Day said. The consultancy was commissioned by Enron to assess the state of Japan's power industry and make suggestions for reform. The Brattle report will be released May 15 at an Enron co-sponsored seminar in Tokyo called, "Reassessing Power Deregulation." Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. UK: INTERVIEW-U.S. Williams enters Europe energy markets. By Stuart Penson 05/09/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON, May 9 (Reuters) - U.S. energy company Williams is gearing up for a push into Europe's deregulating gas and power markets where it will focus on trying to sell its expertise in trading and risk management to local utilities. Williams will launch a European operation in London next week with an initial staff of 25 trading energy in the UK, German, Scandinavia and the Benelux region, the London unit's managing director told Reuters in an interview on Tuesday. "The majority of our business will be around structured transactions to assist utilities in maximising the value of their assets," said Tim Loposer. Williams in Europe would at a later stage expand into trading crude oil and refined products, he said. GROWING BAND OF U.S. TRADERS IN EUROPE Williams is the latest addition to a growing band of U.S. energy companies setting up offices in London, a location they see as the ideal base from which to tap into Europe's potentially lucrative energy markets. Free trading in gas and power is gaining momentum across the European Union as markets open up to competition in line with EU directives on liberalisation. UBS Warburg in a recent report estimated profits from gas and power trading this year in Europe would amount to $1.9 billion, rising to $2.4 billion next year. Companies such as El Paso Energy , Duke Energy , ENRON AEP and TXU Europe are already building trading books in the UK and mainland Europe. "We are trying to differentiate ourselves from the other U.S. companies that have come to Europe," said Loposer. "We are not just a trader and we are not a utility, or a significant owner of generation," he said. Unlike some of its U.S. rivals, Williams was not planning to acquire physical assets, such as power stations, in Europe, said Loposer. "What we are looking for are incumbent utilities which are looking for a partner to help extract value from their assets," he said. "We take care of the physical commodity risk as well as the financial risks, we are very comfortable doing this," said Loposer, adding the strategy in Europe essentially would mirror the company's approach in the U.S. Williams approach will be based on the use of structured deals, or combinations of different trading tools like futures and options. Loposer said the company also would look to bring to Europe experience from the U.S. market of tolling deals, which involve delivering fuel to power stations and then marketing the power generated. SOUTHERN EUROPE AN EARLY TARGET Loposer said his team already was targeting Spain and Italy in its search for risk management contracts. "We are very close to some announcements, there are three or four deals that may come through," he said. "Clearly southern Europe has strong growth," said Loposer. "The divestments are happening there and the fundamentals are fairly strong. That said, we have learned that things can change overnight," he added. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIA: Enron moves execs families out of India - paper. 05/09/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY, May 9 (Reuters) - Families of executives overseeing U.S. energy giant Enron Corp's troubled Dabhol Power Company (DPC) project in India are leaving the country, possibly signalling an intention to terminate the nearly complete $2.9 billion project, an India newspaper said on Wednesday. The Times of India said the children of Enron executives had been pulled out of the American School in Bombay as their families were being relocated to Singapore. It also said security around the expatriate executives had been tightened, and personal bodyguards assigned to senior executives. But the unsourced report said it was not clear if the decision to move the families out of Bombay was made by Houston-based Enron, or reflected personal decisions made by the executives themselves. A spokesman for Dabhol Power Co, the operator of the nearly complete 2,184 MW power plant south of Bombay, told Reuters it was company policy not to comment on administrative and personnel matters. The newspaper said security had been tightened because "there is likely to be a tremendous backlash against representatives of the U.S.-based energy company" if the project was terminated. It said "more than 15,000 jobs in Dabhol will be lost if a decision is taken either to terminate the project or stop construction on Phase II". The project is mired in controversy after the Maharashtra State Electricity Board (MSEB) reneged on its commitment to buy all the power produced by the giant plant, saying it is too costly. MSEB has also defaulted on monthly payments to DPC for the electricity it has taken, forcing the company's board last month to authorise the management to terminate the contract. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India: Dabhol: MSEB denies capacity underutilisation 05/09/2001 Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - Asia Intelligence Wire MUMBAI, May 8. OFFICIALS of the Maharashtra State Electricity Board (MSEB), in a presentation made before the Maharashtra Electricity Regulatory Commission (MERC), today refuted claims that the board underutilised its own capacity to justify power purchase from Enron's Dabhol Power Company. Members of Prayas, a non-government organisation, in a petition filed with MERC, had accused MSEB of flouting merit order dispatch of load shedding to justify DPC phase II. They had also said the State would have 2000 MW of excess power if hydro power was fully utilised and MSEB's Uran plant was used at full capacity. MSEB officials explained that the board could not use hydro electricity beyond its current capacity. "DPC power was drawn by and large to remedy low frequency conditions as the supply from other sources was not sufficient," a senior MSEB official said in his presentation. The officials said the Uran plant was being underutilised due to lack of LNG availability. The use of furnace oil as feedstock would cost the board Rs 16,000 per tonne, resulting in per unit costs of Rs 4, the official said. The board was already making optimum use of its thermal power capacity. According to an official, 95 per cent of DPC power was used to sustain frequency as per the Indian Electricity Grid Code. "Load shedding has always been carried out in consultation with the Western Regional Load Dispatch Centre," he said. - Our Bureau Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. NO PRESSURE FROM INDIAN FEDERAL GOVT ON ENRON ISSUE: MSEB 05/09/2001 Asia Pulse © Copyright 2001 Asia Pulse PTE Ltd. NEW DELHI, May 9 Asia Pulse - The Maharashtra State Electricity Board (MSEB) has said that there is no pressure from the federal government on the state government to continue its agreement with US energy giant Enron-promoted Dabhol Power Company (DPC). MSEB in a letter to the federal governemt denied news reports which suggested that that the deal with Enron could have been scrapped by the state government but for "pressure" from the federal government. (PTI) 09-05 1657 Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. MSEB ropes in HC judge as arbitrator 05/09/2001 The Economic Times Copyright (C) 2001 The Economic Times; Source: World Reporter (TM) THE MSEB on Tuesday appointed a former Bombay High Court judge ML Pendse as its arbitrator, reports Girish Kuber in Mumbai. The formal announcement about Mr Pendses appointment is expected by Wednesday. Enron already has appointed its arbitrator. According to government sources once the two parties complete their formalities for appointing an arbitrator, the case will be tried in London. According to the PPA the dispute resolution clause states that disputes should be referred to an expert for technical matters. And in other cases, the resolution should be by reference to arbitration to be conducted under the New York Convention of 1958 and to be located in London. MSEB had delayed the monthly payments of electricity bills from October last year and subsequently defaulted on payments, claiming that the cost of power produced by DPC was exorbitant. It also slapped two penalty bills of around Rs 800 crore on Enron for failing to generate electricity within the stipulated time period of three hours. Enron subsequently has invoked state guarantees, counter-guarantees and political force majeure, and then went on to invoke the arbitration clause. Meanwhile, the Madhav Godbole panel is yet to receive the names of the members of Enrons lenders and share holders who will be attending the first meeting with the state government panel on May 11. The Godbole panel has been appointed with a mandate to renegotiate the PPA with DPC. Though Enron has accepted the invitation, it has made it clear that it is meeting the panel as a courtesy and it should not seen as its willingness to renegotiate the PPA. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. SJM demands probe into Enron deal The Times of India News Service 05/09/2001 The Times of India Copyright (C) 2001 The Times of India; Source: World Reporter (TM) The Swadeshi Jagran Manch (SJM), an arm of the RSS, has demanded a judicial probe into the Enron deal, while investigating the role of politicians and bureaucrats in the controversy-ridden power project. Ramesh Seth, convener of SJM, Mumbai and Anil Gachke, convener of SJM's national action group on power, have alleged that while examining the feasibility of the project, inflated and fabricated figures of demand for power were given by those in power. When pointed out that this would mean an examination of leaders like Gopinath Munde, Sharad Pawar and Balasaheb Thackeray, Gachke said that a probe should be instituted irrespective of political affiliations. Gachke said the SJM would not budge from their stand of cancellation of the deal. Seth, a qualified engineer, had predicted on behalf of the Manch that Enron power would cost Rs seven per unit in 1996, which was way higher than the actual cost of power. To make people aware of the issue, they have organised a seminar 'Enron -review and thereafter', which will be held today at Ghia Hall, Kala Ghoda at 2 pm. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Plans for more power from Uran unlikely: MSEB Business Times Bureau 05/09/2001 The Times of India Copyright (C) 2001 The Times of India; Source: World Reporter (TM) MUMBAI: The Maharashtra State Electricity Board has stated to the Maharashtra Electricity Regulatory Commission (MERC) that MSEB's plans to generate more power from its idle Uran plant in order to avoid expensive Dabhol power, are unlikely to materialise due to the high costs involved. In a hearing that took place on Tuesday, against a petition filed by SR Paranjpe, MSEB officials made it clear to the Commission that it has to pay Rs 16,000 per tonne for furnace oil to Rashtriya Chemicals & Fertilisers (RCF) which makes the power costlier from Uran. This was because as per the plans worked out by the Union ministry of petroleum and natural gas, MSEB can avail of additional natural gas from GAIL by diverting the gas allocated to RCF. In turn, the Board is expected to pay up the differential price to RCF. But MSEB, in its reply to a question during the hearing, stated that fuel (furnace oil) for RCF costs Rs 16,000 per tonne and if the differential price is to be borne by it, then the cost of power generated from the Uran plant will be over Rs 4 per unit. This, the Board claims, will make it an unviable proposal to be implemented. However, the petitioner has challenged this claim made by MSEB and MERC has asked to present written submissions before the Commission this week. MSEB's Uran plant has a capacity of 913 MW, but only around 300 MW is being generated due to lack of natural gas. This arrangement, initiated by the ministry to offer more natural gas to MSEB, follows a representation made by CM Vilasrao Deshmukh last month. Currently, MSEB has been allocated only 1.6 mmtpa natural gas from GAIL since the output from ONGC's Bombay High has depreciated in the recent past, said sources. Union petroleum minister Ram Naik had earlier announced that the ministry would take all efforts to allocate more natural gas to Uran. The petition had challenged that MSEB had violated the merit order despatch and purchased more power from Enron violating the limits set by MERC in its May 5 order. The Commission will issue an order soon after the petitioners submit their affidavits responding to MSEB's reply to the charges made against them. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron: Preparing for pull out? Pradipta Bagchi 05/09/2001 The Times of India Copyright (C) 2001 The Times of India; Source: World Reporter (TM) MUMBAI: Is Enron preparing to pull out of India? Officially, the answer's ``no''. But in a significant move, the families of the expatriate executives working in its subsidiary, the Dabhol Power Company (DPC), have been shifted out of Mumbai and relocated to Singapore. In addition, the security cover for expatriate executives working in DPC has been tightened, including personal bodyguards for senior executives. According to sources, the families have been shifted from Mumbai and the children of these executives studying in the American School in Bandra-Kurla have been pulled out. An American School spokesperson refused to comment when asked about this. An Enron spokesperson, when contacted, also declined to comment. "It is our corporate policy not to comment on personnel and administrative matters," he said. It is not clear if the decision to move the families out of Mumbai was taken at the corporate level in DPC or whether the decision has been a personal one taken by the expatriate executives themselves. About 15 expatriate officials are working in DPC as part of the management and operations team. According to the sources, uncertainty over the fate of the $2 billion project has led Enron's expatriate executives to move their families out of Mumbai. This is because in the event of the power project being terminated in the next few weeks, expatriate officials feel that there is likely to be a tremendous backlash against representatives of the US-based energy company. Over 15,000 jobs in Dabhol will be lost if a decision is taken either to terminate the project or to stop construction work on phase II of the DPC project. The security around the expatriate officials still working to salvage the project in Mumbai has been tightened. In addition, some of the senior DPC officials have been allocated security personnel to act as their bodyguards. The Enron spokesperson said that the company had just moved its premises to a new building in the Bandra-Kurla complex and the security needs of the company have changed. "We have no extra security than is absolutely necessary", he maintained. It is unclear what will be the fate of the project, with Kenneth Lay, the chairman of Enron Corp, using his veto power to dissuade the Enron board from terminating the project earlier this week. A team of Enron executives is scheduled to meet the government next week to discuss the reccommendations of the Godbole Committee, set up to review the power purchase agreement by the Maharashtra government. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Dabhol lenders willing to back PPA termination Our Banking Bureau Mumbai 05/09/2001 Business Standard 1 Copyright © Business Standard The Maharashtra government's tough stance, combined with the Centre's silence on honouring its counter-guarantee for December last year which has been invoked by the Dabhol Power Company, has left the lenders to the project with no choice but to say yes to DPC's plan of serving the power purchase agreement termination notice. "If the governments (Centre and state) do not come forward to resolve the crisis, it will be difficult for the lenders to convince the company to keep the decision of terminating the PPA in abeyance. We had got a three-week reprieve and we will not be in a position to stretch it further," said a source among the lenders. The deadline expires on May 15. At the DPC board meeting in London in the last week of April, the resolution on PPA termination was passed by a 7:1 vote. The lone voice of dissent was that of the representative of the Industrial Development Bank of India on the DPC board. The three Maharashtra State Electricity Board representatives were not allowed to vote since they were an interested party. "At best, the lender's representative will abstain from voting at the next meeting. We have no moral rights to oppose the move," said another source. The only positive development for which the lenders can claim credit for is MSEB's payment of Rs 134 crore, that too, under protest. "The escrow account with Canara Bank has not yet been activated. A string of clearances has been pending with the state government. The Centre is also not willing to honour its counter-guarantee. The lenders have not been able to achieve any thing," sources added. DPC had invoked the political force majeure clause in its contract with the board. MSEB is now arguing that the invocation of this clause has absolved DPC of all its liabilities. The DPC board authorised the managing director of Enron India to issue a notice for terminating the power purchase agreement to MSEB and the state government. Serving of the notice requires backing of the lenders who have an exposure of about $200 crore in the project. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Prize Petroleum eyes Enron stake in Panna, Mukta Sidhartha New Delhi 05/09/2001 Business Standard 1 Copyright © Business Standard Prize Petroleum Company Ltd has decided to enter the oil and gas production sector by trying to acquire the 30 per cent Enron equity in the Panna, Mukta and Tapti fields in western offshore and has valued Enron's equity at around Rs 600 crore. Prize Petroleum, in which Hindustan Petroleum Corporation Ltd (HPCL) holds 50 per cent equity, will invest Rs 1,900 crore in the project. Of this, Rs 1,300 crore will be the debt component and the balance will be in the form of equity. Prize Petroleum, in which ICICI has 45 per cent stake and HDFC 5 per cent, is in talks with a number of banks to raise the debt portion of the investment. Sources told Business Standard that a substantial portion of the debt has already been finalised and the balance is expected to be clinched shortly. This will be Prize Petroleum's maiden foray into the oil sector. Its promoters had decided to go in for only the discovered fields where risks are low. As a result, it refrained from participating in the two rounds of exploration acreage offered under the new exploration licensing policy. Of late, Enron has been uncomfortable operating the three offshore fields which had been awarded to the Enron-Reliance consortium in 1995. Late last year, it announced its intention to pull out of the project and invited bids to farm out its portion of the equity. The award of the three fields to the consortium was the subject of prolonged controversies, both inside and outside Parliament. It was ultimately cleared by the Supreme Court when the apex court rejected a public interest litigation against the award. An estimated $696 million has been spent on the development of Panna and Mukta. It is learnt that the consortium has put up three well-head platforms in the two fields which are estimated to have 146 million barrels of oil reserves. Tapti is primarily a gas field. ONGC holds 40 per cent stake in this project with Reliance and Enron holding 30 per cent equity each. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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