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Enron Mail |
FYI---one of the many,many articles that have come out over the past few
days. This one captures the essence of most of them. See in particular the part I have highlighted. General reaction in the business community is that Enron must be crazy to have worked this hard to beat the competition, only to withdraw just as the project becomes real. The phones continue to ring constantly. At the same time, we have just received the official notification from the Saudis that we have been awarded, after what is being described as "fierce competition", a piece of Core Venture 2. We have already wired this with Oxy and will exit this week in a manner that hopefully protects the relationships that we have built with the Saudis----but the timing (exactly the same time that we are withdrawing from Dolphin and filing a termination notice for Dabhol) does not help. As you might expect, the mood in the office is terrible----the team is proud of the fact that they started with nothing two years ago have accomplished the impossible against great odds (beating the competition in Dolphin, Saudi, SADAF and Oman, as well as putting together a world-class LNG supply system for Dabhol) only to have it all fall apart with what is perceived as limited redeployment potential and little PRC support because of the "ex EI" stigma. Over the next several days we must work through the UOG Dolphin press announcements, Saudi (we must notify Saudi of our intentions by Wednesday), explanations regarding Dolphin to all of those that have helped us (e.g., U.S. embassy and our local sponsors) and, as luck would have it, the Dubai government wants to proceed with the Jebel Ali Aluminum/electricity deal (I suspect that they will change their mind over the next several days as events unfold). In addition, we have employee meetings on Tuesday to reduce the size of the Dubai/Houston team from 35 to 11. The next several days are not going to be fun.... Rick ---------------------- Forwarded by Rick Bergsieker/ENRON_DEVELOPMENT on 05/19/2001 10:15 PM --------------------------- Jeffrey Hammad 05/18/2001 05:21 AM To: Rick Bergsieker/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Maurizio La Noce/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rob Stewart/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kevin Ruffcorn/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pete Cleary@Enron, Daniella Carneiro@ENRON cc: Jackie Gentle@ECT, Mac McClelland/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Article: Firms Line Up to Swim With Dolphin in Abu Dhabi. Firms Line Up to Swim With Dolphin in Abu Dhabi. 05/17/2001 The Oil Daily © 2001 Energy Intelligence Group. All rights reserved. It's all go in Abu Dhabi, where Enron's decision to sell its 24.5% stake in the Dolphin group has opened the door for other oil companies to join the $8 billion project to pipe natural gas from Qatar to the United Arab Emirates (UAE). At the same time, the oil-rich emirate has launched a tender to sell 28% of Zakum Development Co. (Zadco), which is producing 500,000 barrels per day from the offshore Upper Zakum field. Total Fina Elf, Exxon Mobil, Royal Dutch/Shell, and BP have been invited to bid, and a decision is expected at the beginning of next year. Having been in the cards for a long time, Enron's little-noticed withdrawal from Dolphin was made official about three weeks ago, when it gave the mandatory 30-day notice to its two partners in the consortium, Total and UAE Offsets Group (UOG). Total and UOG will formally announce the news at a press conference in Abu Dhabi on May 21, EIG understands. Enron's share of Dolphin will be sold back to UOG, which is headed by Sheikh Mohammed bin Zayed al Nayhan, who is a UAE Armed Forces chief and a key figure in the Abu Dhabi ruling family. UOG already holds 51% of the project and will then sell whatever portion of its aggregated 75.5% stake it likes. Total, which will operate the upstream side of the project in Qatar, retains its 24.5% interest. Who else will join is a matter of wild speculation, but there is certainly no shortage of interested parties. "The whole industry wants to get involved," a source close to the project said. Among the chasing pack, Conoco is making a strong pitch to join Dolphin, which would compliment its assets in Dubai, where it is operator of 180,000 b/d Dubai Petroleum Co., consolidating its position in the Gulf. Occidental, which like Conoco has no presence in Abu Dhabi, is also sniffing around. And then there are the heavyweights - Exxon, Shell, and BP - all of which are interested and have the advantage of having been in Abu Dhabi's oil sector for more than 20 years. "I think we'll see a veritable feeding frenzy," said one analyst in the region. "There are all kind of oily types coming to Abu Dhabi." After the Enron experience, UOG's priority will be to find a partner that is reliable and seems unlikely to be taken over by a larger company during the course of the 20-year project, people familiar with the company say. This line of thinking would appear to favor the super majors, although smaller players may have more to gain and thus more to offer. The Dolphin departure ends an unhappy chapter for Enron in the Gulf and is part of the group's strategy to divest some of its overseas assets. Enron seemed unable to decide what it wanted to do in Qatar: At first it planned to sell liquefied natural gas (LNG) to Israel, then it switched its attention to selling LNG to India. By the time it joined Dolphin two years ago, Enron had made several enemies in Qatar who would not forgive it for commitments that were never fulfilled. Ironically, Enron has pulled out of Dolphin just when the project looks certain to go ahead. In March, the partners signed the crucial "term sheet" for the $1.5 billion upstream part of the project, which calls for the production of 2 billion cubic feet of gas per day from Qatar's giant North field. The deal is due to be finalized by autumn. Dolphin is on course to deliver the first volumes of Qatari gas to Abu Dhabi in 2005. Abu Dhabi is also pushing ahead with its plan to sell 28% of Zadco, which is 88% owned by state oil company Adnoc and 12% by Japan Oil Development Co. Zadco is a long-running saga: In October 2000, 14.67% was due to be sold to BP and 13.33% to Total, but for reasons known only to itself, the Supreme Petroleum Council decided against the idea. Paul Sampson. © Copyright 2001. The Oil Daily Co. For more infomation, call 800-999-2718 (in U.S.) or 202-662-0700 (outside U.S.).
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