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Reliance plan could sour BG's Indian deal

Reliance Industries Ltd wants to become the operator of three oil and gas fields off the country's west coast, complicating UK-based BG Plc's proposed acquisition of a 30 per cent stake in the fields, an industry source told Reuters on Wednesday.

Reliance, which owns a 30 per cent stake in the fields, has applied to the government to be appointed the operator, said the source, who declined to be identified.

That could potentially derail the deal BG announced last week to buy US-based Enron Corp's 30 per cent stake in the offshore Indian energy fields for $388 million.

Numerous reports in the Indian media have said that the deal may be contingent on operatorship of the fields being transferred from Enron, the current operator, to BG.

A spokesman for BG in London said on Wednesday that the company was "continuing discussions with the other parties" and until the matter was resolved, it had no further comment to make.

Indian state-run driller ONGC, which owns the remaining 40 per cent stake in the Panna, Mukta and Tapti fields, has already said it wants to take over the operatorship.

The source said Reliance Industries, India's leading petrochemicals maker and flagship company of the country's largest business group, is also pursuing management control.

Panna, Mukta and Tapti lie off India's western coast, and are considered among the more promising recent finds in the country.

Panna and Mukta produce 29,000 barrels of oil and 2.5 million cubic metres of gas per day.

The Mukta field produced 1,974 million cubic metres of gas in the year ended March 2001.

BG said it wants a stake in the fields to complement its Indian interests in gas distribution and liquefied natural gas.

Enron wants to leave the venture as a part of its move to focus on the high-growth energy trading usiness.

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