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BG Group buys Enron's Indian oil, gas fields

Britain's BG Group Plc has bought Enron Corp's Indian unit that operates three oil and gas fields for $340 million but it needs to sign a new production sharing contract for the fields, officials said on Friday.

The BG Group completed the purchase of the entire share capital of Enron Oil and Gas India Ltd on Thursday.

Bankrupt US energy trader Enron Corp has given certain performance guarantees -- measuring the efficiency and output -- for its subsidiary operating the fields, and these will have to be reviewed, an Indian government official said.

"EOGIL's parent has changed, so we will have to sign a contract with the new daddy," the official, who did not want to be named, told Reuters.

EOGIL has a 30 per cent stake in the Tapti gas field and the Panna/Mukta oil and gas fields. State-run Oil and Natural Gas Corp, holds 40 per cent and India's biggest petrochemicals group, Reliance Industries holds the remaining 30 per cent.

ONGC, which discovered these fields, wants to operate the fields after Enron's exit.

A petroleum ministry official said the three partners would have to resolve this issue among themselves. "Otherwise we will have to step in."

The BG Group, in a statement on its Web site, said EOGIL, which will be renamed BG Exploration & Production, will continue to operate these assets.

The petroleum ministry official said this was only a "temporary arrangement".

The Panna-Mukta fields have recoverable reserves of 184 million barrels of oil and oil equivalent in gas, and the Tapti gas fields had reserves of 96.3 million cubic metres of gas.

ONGC discovered the fields but the government invited foreign and local firms to invest and develop them in the early years of India's economic reforms which began a decade ago.

Enron Corp filed for bankruptcy on December 2 in the largest US filing ever, listing some $40 billion in debt. The move left creditors including banks, bondholders, former employees and trade vendors to fight for a share of the assets in the collapsed firm.

Enron is also seeking to sell the 85 per cent foreign equity stake of its $2.9-billion Indian power plant which has lain idle since June 2001 following a payment dispute between the US firm and the Maharashtra State Electricity Board.

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