The two public sector oil `navratnas' have reiterated that they will "positively throw their hats" into the ring once the bidding formalities are finalised by Enron Oil. However, Bharat Petroleum Corporation Ltd (BPCL) is not likely to participate as the upstream sector is not on its priority list for the moment.

The US-based Enron Oil had announced its intention to withdraw from the Tapti and Panna-Mukta fields late last week where it has a 30 per cent stake along with Reliance Industries (RIL). The balance 40 per cent is held by Oil and Natural Gas Corporation which has already indicated its interest to buy out Enron Oil's holding in the Rs 4,000 crore venture.

Enron had conveyed to the petroleum ministry that its intention to call it quits from the joint venture was part of an effort to rebalance assets in India and other parts of the world while expanding into trading operations and communications infrastructure.

It is still not clear if the production sharing contract provides for the first right of refusal to the co-promoters in which case both RIL and ONGC will need to be offered Enron's stake. Sources, however, say, that such sale of equity can go through a process of open bidding for which the only formality is seeking government approval.

The oil fields were initially developed by ONGC after which the RIL-Enron consortium entered the picture more than five years ago.

The Indian upstream major had spent over Rs 650 crore for its efforts and believes that it is only fair that it be given the first right of refusal. This seems unlikely as Enron would be interested in getting the best price for its stake.

In this context, it is more than probable that some multinational oil companies would be as interested in participating in the bidding process.

The names doing the rounds are Marathon, Premier Oil, Shell, Petrobras, Exxon-Mobil and TotalFinaElf though this could not be confirmed from these companies directly. The Panna-Mukta and Tapti fields have the potential to produce over 300 million cubic metres of gas and 29,000 barrels of oil daily.HPCL and IOC have already indicated that they are keen on making a foray into the upstream sector unlike BPCL which believes that this is a risky activity involving heavy capital investment and a high degree of expertise.

HPCL kicked off a joint venture company styled Prize Petroleum with ICICI, TDICI and HDFC as partners where the idea was to work on producing fields both here and abroad. Nothing has happened in the last three years since the joint venture was incorporated and HPCL is now of the view that it makes strategic sense to make a beginning in the Panna-Mukta and Tapti fields where it could benefit from working with a giant like ONGC.

In its turn, IOC entered into a strategic alliance with ONGC nearly two years ago to share expertise in key petro-related activities like exploration, refining, petrochemicals, power and consultancy services. The two navratnas have identified Russia, Iraq and parts of the CIS as areas with tremendous potential for exploration work. IOC also has a memorandum of understanding with Premier Oil of the UK for its upstream efforts though no concrete work has taken off yet in this alliance.

An interesting theory doing the rounds suggests that both IOC and ONGC could bid jointly for Enron Oil's 30 per cent stake in the Panna-Mukta and Tapti projects. This would ensure that financial strengths are combined to make an attractive offer which, in turn, will benefit both companies in their endeavour to make the most of these prospective blocks.