Though top executives of Shell including Royal Dutch Shell Group of Companies vice-chairman Jeroen Van Der Veer refused to comment on the probability of acquiring Enron's assets in India, highly-placed sources indicated that the MNC is definitely on the prowl. "We have it on authority that the Shell-Cairns combine has been doing some quiet spadework in this area as well," revealed knowledgeable corporate sources.

He is currently on a visit to India firming up the company's various investment plans in the LNG sector as well as its plans of bidding for the public sector IBP. Mr Van Der Veer is also the president of the Royal Dutch Petroleum Company.

Sources also revealed that the beleaguered EOGIL, which is ostensibly pulling out of India "driven by a perceptible reorientation of its corporate philosophy whereby the company is positioning itself as a new economy company centred around its expertise in risk managment in training," has also decided to sell its assets in India as a package rather than on a piece-meal basis. Taking a leaf out of UK-based PowerGen's book which recently transferred its assets and liabilities in India to the Hong Kong-based multinational China Light and Power, Enron too is supposedly keen to sell its assets as a consolidated package, sources close to the company's top brass said.

Interestingly, in its latest assessment of Enron's decision to move out from India, Wood Mackenzie, among the leading international energy consultants in the world, has ranked the Shell-Cairn duo as the strongest contender for Enron's assets in India. According to the report, a copy of which is available with The Financial Express, "we can see potential for a joint bid by these two companies in line with their existing partnership in Bangladesh and parts of India. Enron's assets would consolidate Cairn's already impressive upstream assets position in India too." It is worth noting that Cairns Energy has also recently entered into an agreement with the public-sector Gail and Gujarat State Petroleum Corporation Ltd to jointly bid for the oil and gas blocks under the second round of the New Exploration Licencing Policy.

Apart from the formidable Shell-Cairns combine, the Wood Mackenzie evaluation has also listed the UK-based Tullow Oil which has "quietly built up a significant upstream presence" as a potential buyer of Enron's Indian assets. While Tullow's current Indian portfolio consists of 100 per cent exploration acreage, what makes the MNC another strong bidder is the fact that "in its recent acquisition of UK upstream assets from BP, Tullow has shown itself keen to acquire producing assets which provide much needed cash flow to fund its exploration activities, a strategy successfully exploited by Cairn in India."

And while even the Wood Mackenzie evaluation places the Indian corporate goliath, Reliance in a "pole position" in the race to acquire EOGIL (Enron Oil and Gas India Limited) not only by virtue of being its partner in the fields (of Panna, Mukta and Tapti) but because of its financial power and "enormous clout in the corridors of power in New Delhi", the international energy consultant pointedly questions the prudence of Reliance acquiring these assets. "One would have to ask if the resultant reduction in the number of private players holding interests in producing assets was good for the upstream sector in India," the report states.

Apart from these companies, which are currently active in India, Wood Mackenzie has drawn up a second set of potential buyers consisting of players "who are not currently active in india but could use EOGIL as their entry vehicle into India." These include the likes of Premeir Oil, Burlington, BHP and Petronas." Though these companies have thus far not shown any appetite for the Indian upstream sector, "the prospect of acquiring producing assets in a country with an energy starved market offering high gas prices could yet entice them to pursue a slice of the upstream cake," predicts the Wood Mackenzie report.

As far as the actual evaluation of EOGIL's assets in India goes, Wood Mackenzie has pegged the value of Enron's assets, which include a 30 per cent stake in the Panna-Mukta and Tapti fields at $545 million net remaining present value under current oil price assumptions - $28/bbl in 2000, $23/bbl in 2001 and $19.50/bbl in 2002. However, the valuation under an oil price assumption that falls within OPEC's target range of $24/bbl to $28/bbl ranges from $609 million to $658 million at a discount rate of 10 per cent.

The evaluation of EOGIL's assets does not, however, include its stake in the Cambay offshore exploration block which, the Wood Mackenzie report maintains "requires greater access to data."

CCEA clears DPC equity recast
The Cabinet Committee on Economic Affairs on Wednesday approved a proposal to restructure the equity structure of Dabhol Power Company. Briefing the press after the CCEA meeting, Information Technology Minister Pramod Mahajan said, "The foreign equity of $1,119.9 million will be contributed through Enron Mauritius Company.''