Reliance wants to become operator

Vol 4, PW 19 (25 Oct 00) Exploration & Production
     

India's Supreme Court has a habit of reacting late to events.

When the power company Cogentrix announced it was quitting India on 9th December last year, the Supreme Court five days later cleared it of all corruption charges. Same story with Enron.

Hardly two days after the company's meeting with oil minister Naik, the Supreme Court upheld the fields' award to Enron and its consortium partner Reliance and absolved them of any wrongdoing. As with Cogentrix, the Supreme Court decision will not make Enron change its mind.

A source confirms the company intends to sell its 30% stake at Panna, Mukta and Tapti. "The (Supreme Court) ruling won't make the slightest difference." But who will buy In the last few weeks, Enron's joint venture partner Reliance has emerged the most likely buyer.

Whether Enron will be happy to sell to Reliance is unclear. In London, the two companies are slugging it out in a courtroom - hardly an ideal backdrop for buyer-seller negotiations.

Ultimately though, Enron may have no choice but to sell to Reliance. Who else would have the courage to acquire a concession mired in litigation and allegations of corruption The Supreme Court ruling should ensure the end of court cases, but it probably wont.

In India, misuse of Public Interest Litigation is legendary. Any company - other than Reliance - that acquires Enron's stake at Panna, Mukta and Tapti could find itself summoned before a court and forced to justify its acquisition.