QATAR: Qatar, Dolphin final gas pact not seen before Sept.
Reuters English News Service, 04/22/01

INDIA: Enron's Indian unit directors to meet on April 25-paper.
Reuters English News Service, 04/22/01

Centre to take up Enron issue today
Hindustan Times, 04/22/01

Maha to set up experts committee for negotiations on Enron
Press Trust of India Limited, 04/22/01

ONGC disputes Enron's claim on Moon Prospect project at Tapti
Press Trust of India Limited, 04/22/01

Cyclist injured in MS 150 tour / Rider's condition called critical after 
hitting head
Houston Chronicle, 04/22/01

Power price rise stirs furor ; Energy firms deny claims of manipulating 
markets
San Antonio Express-News, 04/22/01

India Dabhol Pwr Project Shrholders Mtg In London Apr 25
Dow Jones International News, 04/21/01

India: Lenders stop funds to Dabhol
Business Line (The Hindu), 04/21/01

DPC board meet on Apr 25 to decide Dabhol fate in London
Press Trust of India Limited, 04/21/01

Enron may sell its stake in DPC.
Business Times (Singapore), 04/21/01

Enron may bail out of Indian power project
The Daily Deal, 04/21/01



QATAR: Qatar, Dolphin final gas pact not seen before Sept.

04/22/2001
Reuters English News Service
(C) Reuters Limited 2001.

DUBAI, April 22 (Reuters) - Qatar and Dolphin Energy Ltd (DEL) are moving 
ahead on a landmark deal to channel Qatari gas to the UAE, but a final 
development and production sharing agreement (DPSA) may not be struck until 
September, industry sources said on Sunday. 
Qatar and DEL, majority owned by the United Arab Emirates' Offsets Group 
(UOG), in March signed a "commercial term sheet agreement" for the 
long-awaited $3.5 billion project.
Qatari Oil Minister Abdullah al-Attiyah said at the signing ceremony he 
expected a DPSA to be signed in June. 
Industry sources now say that target date looks ambitious and expect the 
final DPSA and general sales agreements to be in place after the summer. 
Qatari officials, while admitting the final signing could be some months off, 
said Doha was ready to put pen to paper. 
"From our side there is nothing much left that remains to be finalised," a 
senior Qatar Petroleum (QP) official closely involved with the deal told 
Reuters. 
"The term sheet is comprehensive and lays down all the conditions of the 
development and production sharing agreement." 
Analysts said a PSA of Dolphin's scale typically would take about a year to 
finalise, but the pace would be quicker with this project since key details 
already had been hammered out. 
Asked whether signing of the PSA could be delayed, the Qatari official said: 
"It could be from their (DEL's) side, but not from us." 
"It is for them (DEL) to organise and put things in place at their end," the 
official added. "As far as we are concerned, we are prepared to sign the PSA 
for two billion cubic feet a day (cfd) of gas as and when they are ready." 
UOG declined comment. 
UOG currently owns 51 percent of DEL, with the remainder held equally by U.S. 
Enron Corp and France's TotalFinaElf. 
While the finishing touches are being put on the deal, industry sources said 
new potential foreign investors are sizing up DEL's prospects. 
The gas deal would entitle DEL to develop a tract of Qatar's giant North 
Field and produce up to two billion cfd of gas. 
UOG is to invest $2 billion in developing the North Field tract, drilling and 
setting up production facilities. 
The remaining $1.5 billion would be invested to lay a pipeline and set up 
receiving terminals at Dubai's Jebel Ali and Taweelah in Abu Dhabi. 
First gas is targeted to reach the UAE capital Abu Dhabi by late 2004 or 
early 2005. About one billion to 1.5 billion cfd of Qatari gas would be 
consumed by utilities in Abu Dhabi with the remainder supplied to Dubai.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


INDIA: Enron's Indian unit directors to meet on April 25-paper.

04/22/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, April 22 (Reuters) - The directors of U.S. energy giant Enron Corp's 
Indian unit are scheduled to meet on April 25 in London to decide on the fate 
of a 2,184 MW power project in the western Indian state of Maharashtra, a 
local newspaper reported on Sunday. 
The Indian Express said Enron has authorised its representatives and Dhabol 
Power Corporation (DPC) managing director Neil Mcgregor to look at various 
options, including the sale of Enron's stake in Dabhol.
A DPC spokesman in Bombay confirmed to Reuters that the meeting was scheduled 
but did not disclose details. 
The report said a notice of the meeting has been sent to Maharashtra State 
Electricity Board (MSEB) which has a 15 percent stake in DPC. 
A three-member team led by MSEB chairman Vinay Bansal will be attending the 
meeting, the report added. Bansal also confirmed the meeting to Reuters but 
did not divulge details. 
Enron's Indian unit has also called a meeting of its lenders on April 23 to 
discuss the ongoing payment row with India's Maharashtra state government. 
The meeting will be in London and will be attended by international as well 
as local lenders of the DPC. 
Creditors have extended $1.2 billion in loans to finance construction of a 
second phase of the plant, which is expected to begin operating later this 
year, tripling the plant's power output. 
The move comes amid escalating tensions between Enron and Maharashtra over 
the inability of the state's utility to pay its monthly bills. 
MSEB has been defaulting on payments since October for electricity purchased 
from Dabhol's 740 MW power plant on the state's west coast. The amount 
outstanding totals 2.26 billion rupees ($48.24 million). 
In an effort to compel payment, Dabhol has twice invoked a federal government 
guarantee to cover payment defaults by the state utility. 
The dispute has caused Enron to freeze most of its investment plans in India 
and has also affected foreign investment in India's power sector. 
The state government signed a contract in the mid-1990's to buy the plant's 
entire power output. But a rise in the cost of naphtha, the fuel currently 
used to power the plant, and a decline in the value of the Indian rupee 
against the dollar, has inflated the cost of the power produced by the Dabhol 
plant beyond the price expected at the time the contract. 
That has made the power produced by the Enron plant twice the cost of power 
produced by other suppliers in the state, fuelling popular and political 
pressure to scrap the contract.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Centre to take up Enron issue today
PTI

04/22/2001
Hindustan Times
Copyright (C) 2001 Hindustan Times LTD; Source: World Reporter (TM)

IN ORDER to resolve the imbroglio over payment crisis between the state 
electricity board (MSEB) and US energy major Enron-promoted Dabhol Power 
Company (DPC), Maharashtra will set up "an experts" committee for 
negotiations even as the multinational is contemplating winding up of its 
operations in the country. 
"We are now going for negotiations and will form an experts committee in 
which Maharashtra expects the Centre to participate," Chief Minister Vilasrao 
Deshmukh said.
"All the four parties namely the State, Union Government, Enron and MSEB 
should come together for negotiations, otherwise it cannot be a complete 
exercise," he added. 
Deshmukh and MSEB team are scheduled to meet Finance Minister Yashwant Sinha 
and Power Minister Suresh Prabhu tomorrow in New Delhi to discuss the 
stalemate and find a "acceptable solution" for the same. "I am meeting Sinha 
and Prabhu to request them to take an initiative and send representatives for 
the negotiations committee," he said. 
Deshmukh's meeting with the Centre comes at a crucial stage as DPC's lenders 
would be meeting in London, on the same day, to decide upon the future 
finances of the controversy marred 2,184-MW project in Dabhol. 
Moreover, DPC board is also scheduled to meet on April 25 in London to decide 
the fate of its $900 million project in Dabhol, including winding up of its 
operations. The meeting would discuss the top most item on the agenda, which 
was to empower DPC managing director Neil McGregor to wind operations in the 
country. DPC has already slapped one conciliation notice on the Centre and 
three arbitration notices on the state government over non-payment of dues 
amounting to Rs 213 crore plus interest towards the bills due for the months 
of December 2000 and January 2001. Asked whether the Centre had send any 
feelers over a possible clubbing together of the arbitration and conciliation 
processes, Deshmukh replied in the negative. 
Meanwhile, Power Minister Suresh Prabhu said the Centre will render all 
possible help to resolve the Enron crisis which is haunting the entire 
country. 
Prabhu said he would meet the Vilasrao Deshmukh in New Delhi tomorrow to 
discuss stalemate over the payments dues. 
Bansal had said that MSEB would present its case concerning the Rs 401 crore 
penalty that the loss-making board slapped on DPC.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Maha to set up experts committee for negotiations on Enron

04/22/2001
Press Trust of India Limited
(c) 2001 PTI Ltd.

Mumbai, Apr 22 (PTI) In order to resolve the imbroglio over payment crisis 
between the state electricity board (MSEB) and US energy major Enron-promoted 
Dabhol Power Company (DPC), Maharashtra will set up "an experts' committee 
for negotiations" even as the multinational is contemplating winding up of 
its operations in India. 
"We are now going for negotiations and will form an experts committee in 
which Maharashtra expects the Centre (federal government) to participate", 
state chief minister Vilasrao Deshmukh told reporters here Sunday.
"All the four parties namely the state, federal government, Enron and MSEB 
should come together for negotiations, otherwise it cannot be a complete 
exercise", he added. 
Deshmukh and MSEB team are scheduled to meet federal Finance Minister 
Yashwant Sinha and Power Minister Suresh Prabhu Monday in New Delhi to 
discuss the stalemate and find a "acceptable solution" for the same. 
"I am meeting Sinha and Prabhu to request them to take an initiative and send 
representatives for the negotiations committee", he said. 
Deshmukh's meeting with the federal government comes at a crucial stage as 
DPC's lenders would be meeting in London, on the same day, to decide upon the 
future finances of the controversy marred 2,184-mw project in Dabhol. 
Moreover, DPC board is also scheduled to meet on April 25 in London to decide 
the fate of its USD 900 million project in Dabhol, including winding up of 
its operations. 
(THROUGH ASIA PULSE) 22-04 2001

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


ONGC disputes Enron's claim on Moon Prospect project at Tapti

04/22/2001
Press Trust of India Limited
(c) 2001 PTI Ltd.

New Delhi, Apr 22 (PTI) India's state-owned Oil and Natural Gas Corporation 
(ONGC) has virtually dismissed the 15 million dollar Moon Prospect gas well 
project at Tapti fields saying there was no substantial recovery contrary to 
claims of a big find by the joint venture (JV) parnter, Enron. 
"Enron, which is the operator of the field, has not shared results of the 
ambitious Moon Prospect gas well project with JV partners - ONGC and 
Reliance. The project seemed to have turned into a hollow gas well," senior 
ONGC officials said.
Significantly, the setback on Moon Prospect comes at a time when Enron has 
put its 30 per cent stake in the JV on the bloc. 
ONGC has 40 per cent stake in the 900 million dollar venture while Reliance 
has 30 per cent stake. Tapti, along with Panna-Mukta oil and gas fields, was 
awarded to the consortium of ONGC-Enron-Reliance in 1992 for exploration. 
Enron has claimed 1.5 trillion cubic feet of gas reserves in place, of which 
25-30 per cent are recoverable reserves, sources said, adding "We, however, 
feel there aren't substantial reserves in place for commercial exploitation." 
After over three months of drilling and spending 15 million dollar, the well 
reached the final depth but not substantial hydrocarbon reserves have been 
struck, they said. 
"Though sophisticated and expensive techniques has been used for drilling and 
logging, so far the well has not brought about any reliable information about 
the possibliy of hydrocarbons," sources added. 
There are major differences among the three JV partners over the costs of the 
project, with both ONGC and Reliance alleging that the operator (Enron) was 
working in excess of the limits of the costs specified in the agreement 
though no approval has been given for increase, sources said. 
Differences also exist among the three promoters about the prospects and 
exact reserves in place in Panna-Mukta and Tapti oil and gas fields, sources 
said. 
While Enron has already has arbitration against ONGC and Reliance for not 
paying the expenses incurred by them, the partners are of the view that Enron 
Oil and Gas India Ltd (EOGIL) is not operating the fields in the cost 
effective way. 
Designed to evaluate deeper hydrocarbon potential of middle-lower, Eocene and 
Paleocene sections, Moon Prospect has been conceived to be highly potential 
with 4-way closure, covering about 5,000 acres, sources said. 
Tapti lies 160 km north-northwest of Mumbai in a water depth of 20 meters. 
The JV has already installed three well platforms, one process platform, one 
flayer platform and intrafield pipeline network. It has drilled 25 wells and 
also installed a gas export pipeline tied to ONGC's pipeline to Hazira. 
(THROUGH ASIA PULSE) 22-04 2001

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


A
Cyclist injured in MS 150 tour / Rider's condition called critical after 
hitting head
ROSANNA RUIZ
Staff

04/22/2001
Houston Chronicle
4 STAR
42
(Copyright 2001)

A bicyclist was in critical condition at Memorial Hermann Hospital Saturday 
after falling and injuring his head on a highway near Bellville, officials 
said. 
The 46-year-old man, whose identity was not released, was among about 8,000 
people making the annual BP MS 150 bicycle tour to Austin to raise funds to 
fight multiple sclerosis.
Grace Anderson, a hospital administrator, said the victim, who had been 
brought to Hermann by helicopter, was treated for a head injury and remained 
in critical condition. 
The accident happened just after 11 a.m. outside Bellville in Austin County, 
said Pat Bertotti, president of the Lone Star Multiple Sclerosis Society, 
which sponsors the 180-mile bike tour. 
Details of what caused the accident were not known although Bertotti said the 
man was injured when he was thrown by the force of the accident over the 
handlebars. 
The National Multiple Sclerosis Society's Lone Star chapter sponsors the 
annual bike tour. 
The tour event began at 7 a.m. Saturday, traveling from Tully Stadium, 
Interstate 10 and Dairy Ashford. The bicyclists were expected to start 
crossing the finish line in Austin as early as 10:30 a.m. today. Organizers 
said riders stop overnight in La Grange.


Photo: Enron riders John and Laurie Cullen, left, and Tom Rainbow join the BP 
MS 150 in Houston Saturday. The ride to Austin benefits multiple sclerosis. 
Laurie Cullen and Rainbow have the disease. 

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Business
Power price rise stirs furor ; Energy firms deny claims of manipulating 
markets
Michael Liedtke
Associated Press

04/22/2001
San Antonio Express-News
Metro
01K
(c) Copyright 2001 San Antonio Express-News. All Rights Reserved.

In Houston, it's known as "the power corner." Separated by just a few city 
blocks, four major power wholesalers run trading exchanges that have a strong 
influence on energy prices nationwide. 
The trading floors run by Enron Corp., Reliant Energy Inc., Dynegy Inc. and 
Duke Energy Corp. represent ground zero in a power crisis threatening the 
quality of life in much of the western United States this summer.
By seizing upon opportunities created by deregulation, the energy traders 
have turned up the juice in the electricity business in ways similar to how 
junk bond traders ignited Wall Street in the 1980s and venture capitalists 
fueled Silicon Valley last decade. 
And thanks to an exemption granted in the early 1990s, nobody monitors daily 
trading to detect unfair or illegal practices. 
Utility bills in California have gone up nearly fourfold in the past year, to 
$27.1 billion. Without fundamental changes in the energy market, this year's 
bill will rise to $70 billion - more than $2,000 for every person in the 
state, according to operators of the state's power grid. 
The staggering electricity price increases have pushed the state's largest 
utility, Pacific Gas and Electric, into bankruptcy and left No. 2 Southern 
California Edison on the brink of insolvency. California's once-ample budget 
surplus also has shriveled, as the state is spending about $50 million a day 
to buy enough power to keep the lights on. 
The energy wholesalers say they're doing nothing wrong. 
They blame the high prices on the rising price of natural gas, burned to 
generate electricity, and the state's botched deregulation plan. By failing 
to line up reliable power ahead of time and by imposing price caps for 
consumers, the state put itself into this mess, the companies say. 
"There have been accusations of wrongdoing for eight months now, and there 
isn't a shred of evidence to support the allegations," said Gary Ackerman, 
executive director of the Western Power Trading Forum, a Menlo Park, Calif., 
trade group. "People are very angry and frustrated about electricity right 
now, and attorneys are trying to take that anger out on us." 
Attorneys general in Washington, Oregon and California are probing whether 
the wholesalers have violated antitrust laws or engaged in unfair business 
practices. A California state senate committee might issue subpoenas for 
records and the testimony of top energy executives, and at least five 
lawsuits accuse energy companies of market abuses. 
"This is the best fraud I have ever seen," said attorney Michael Aguirre of 
San Diego, who is involved in one of the class-action suits. "The generators 
are doing everything that you think that they might be doing, only it's worse 
than you ever imagined." 
The lawsuits and investigations allege that generators have conspired to 
hijack billions of dollars from consumers and taxpayers by withholding 
electricity from energy-starved California until the last minute, and then 
supplying it at exorbitant prices. 
At Enron's headquarters in Houston, energy specialists among the company's 
1,500 traders swap electricity and natural gas contracts like stocks and 
bonds. Mathematicians, meteorologists and economists make complex 
calculations to identify where to buy the cheapest power and where to deliver 
it at the greatest profit. 
"They are extremely good at what they do," said Severin Borenstein, director 
of the University of California at Berkeley's energy institute. 
The Internet has provided the traders with the tools to do their jobs even 
better. Online marketplaces and password-protected exchanges provide them 
with invaluable real-time information on the buying and selling patterns of 
their rivals. 
Two lawsuits allege that traders have parlayed the sensitive information 
collected online to fix prices artificially high, a violation of antitrust 
laws. 
Aguirre has spent six months assembling reams of data about traders and their 
activities, but he has yet to develop concrete evidence to prove his 
price-fixing allegations. 
A March 21 report by California's electricity grid managers concluded that, 
between last May and November, 98 percent of trading bids were driven up by 
noncompetitive patterns of behavior. 
The California Independent System Operator report stopped short of accusing 
wholesalers of illegal market manipulation, but it did determine that the 
wholesalers collected as much as $6.9 billion in "unjust and unreasonable" 
rates. 
Enron says its trading system, particularly the online exchange, has resulted 
in fairer and more efficient markets. The allegations of market abuse are 
"just some sour grapes from people who didn't come up with the idea in the 
first place," said Enron spokesman Eric Thode. 
The online exchanges and other industry Web sites provide the energy traders 
with a window to see the energy availability and bids in markets around the 
country. 
Power industry critics, however, contend the Web's instant access provides 
the traders a way to exploit a delicate supply-demand balance. If the scale 
is tipped even slightly toward an inadequate supply, they say, prices soar 
and energy traders reap huge gains. 
"The whole trading thing is just a front that lets them game the market," 
Aguirre said. "They can get away with it because no one (outside the 
industry) can figure out what they are doing." 
Whatever the energy traders are doing, it's not closely monitored by 
government regulators. 
In 1993, the trading of energy products received an exemption from oversight 
by the Commodity Futures Trading Commission, a federal agency that oversees 
commodity and options trading to protect markets from fraud and manipulation. 
Energy is the only commodity that has received a blanket CFTC exemption. 
The exemption was shepherded beginning in 1992 by then-CFTC chairwoman Wendy 
Gramm, wife of Texas Sen. Phil Gramm. She left the CFTC three months before 
the exemption received final approval in 1993. That same year, she joined the 
Enron board of directors, a post that last year earned her $50,000. 
Gramm, an economist at the Mercatus Center at George Mason University, said 
she doesn't recall talking with Enron about the exemption, which she 
characterized as a routine matter triggered by an antitrust case involving 
crude oil. 
"It really didn't have anything to do with Enron or any specific company," 
said Gramm. "It had to do with a general market problem." 
In granting the exemption, the CFTC accepted the industry's contention that 
it shouldn't be subjected to the government's usual commodities regulation 
because its markets are dominated by "large sophisticated commercial 
entities" capable of protecting themselves - in short, that there would be no 
little people to hurt. 
At the time, then-CFTC commissioner Sheila Bair scoffed at the reasoning, 
comparing energy traders to boiler room sales operations that had the 
potential to violate federal anti-fraud laws. 
"Is it really that much of burden on market participants (for the CFTC) to 
retain a sliver of authority regarding fraudulent activity?" Bair wrote in a 
dissenting opinion. 
Wholesale electricity prices negotiated by the traders eventually are 
compiled in quarterly reports and reviewed by the Federal Energy Regulatory 
Commission. And while FERC by law is supposed to prevent unfair prices, a 
majority of its commissioners have advocated a hands-off approach to 
California's energy crisis, insisting that the market can correct itself. 
That posture may finally be changing somewhat. Last Wednesday in San Jose, 
Calif., FERC Chairman Curt Hebert told lawmakers that his agency hopes to 
begin "monitoring and mitigating" the wholesale electricity market by May 1. 
This could allow FERC to preemptively influence prices. 
Energy economists who have studied the market see signs of ruthless - but 
perfectly legal - behavior. 
Paul Joskow, an MIT economist, concluded in January that electricity 
producers deliberately withheld power to drive up prices. 
"Every business exercises market power when it can, so I don't know why 
people are so surprised that (the generators) used their market power," 
Joskow said. "I didn't see any evidence of collusion in what they did. It was 
just good business." 
Enron's specific trading methods remain a mystery even to industry analysts, 
partly because the company considers its techniques to be proprietary. But it 
yielded a big payoff last year - an operating profit of $1.6 billion, up 160 
percent from $628 million in 1999. 
When electricity and natural gas prices soared to record highs in the fourth 
quarter, Enron's trading profit more than tripled to $538 million. 
Without providing specifics, Enron officials said the profits poured in from 
all over the country. 
"Our success is linked to efficient markets, not higher prices in California, 
or anywhere else for that matter," Steve Kean, an Enron executive vice 
president, said in January testimony before the U.S. Senate. "What we are 
interested in is competitive and well-functioning markets. Our financial 
success is not built on California's back."


JUSTIN SULLIVAN/Associated Press Attorney Michael Aguirre stands in front of 
the State of California Building in San Francisco. Aguirre says he has never 
felt more strongly about a case as the one he is pursuing against the power 
wholesalers behind California's high electricity prices. 

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


India Dabhol Pwr Project Shrholders Mtg In London Apr 25

04/21/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- Enron Corp.'s (ENE) Indian unit Dabhol Power Co.'s 
shareholders will meet in London April 25 to possibly discuss the future of 
their 2,184-megawatt electric power project in the western Indian state of 
Maharashtra, Enron India's spokesman told Dow Jones Newswires late Saturday. 
Enron Corp. has a 65% controlling stake in the controversial $3 billion 
Dabhol project, which supplies power to the State Electricity Board. The 
project is India's biggest foreign investment. Maharashtra State Electricity 
Board with 15%, General Electric Co. (GE) with 10%, and Bechtel (X.BTL) with 
10% are the other shareholders in the project.
"I confirm that a DPC board meeting will be held in London on April 25. I am 
not in a position to give any more details," said Jimmy Mogul, spokesman for 
Enron India Ltd. 
DPC's other shareholders weren't immediately available for comment. 
As reported, a meeting of Dabhol Power Co. lenders is taking place in London 
April 23. The meeting has been called at the initiative of Dabhol Power to 
update its lenders on the current situation of the project. DPC has nearly 40 
lenders that include Indian and international financial institutions. 
Last week, DPC served two notices of arbitration on the Maharashtra state 
government. 
In a statement, Enron India said the notices were served because the 
Maharashtra government had failed "to honor its obligations under the 
government of Maharashtra State Support Agreement and Supplemental State 
Support Agreement," signed in 1994 and 1996, respectively. 
DPC said in the agreements that the Maharashtra government had pledged to 
"support and encourage the further development and completion of the Dabhol 
project." It added that "without justification," the Maharashtra government 
has gone back on these agreements, which has "adversely and materially 
impacted DPC's ability to perform under its contractual agreements." 
The statement added that as part of the arbitration process, an independent 
three-person panel will be set up to determine whether the Maharashtra 
government has "failed to comply with its obligations." 
Under a 1996 counter-guarantee agreement, the federal government is obliged 
to pay Enron when MSEB defaults. 
Enron invoked that guarantee in February, marking the first time in India's 
history that a company has invoked a federal guarantee, when the state 
utility said it couldn't afford to pay DPC. The state government finally paid 
$17 million in outstanding bills. 
DPC and the federal government recently started a conciliation process, to be 
governed by the provisions of the U.N. Commission on International Trade Law, 
with the aim of resolving DPC's latest dispute with MSEB. 
DPC says MSEB owes it 1.02 billion rupees ($1=INR46.8150) for power supplied 
in December 2000. For its part, the MSEB said it wanted the power bill to be 
offset against a INR4 billion fine it levied on DPC for what it said was the 
non-supply of power for intermittent periods between October 2000 and the end 
of January. 
Dabhol, India's largest private power plant currently under construction, was 
scheduled for commissioning in two phases. The project's first phase, a 
740-megawatt power plant, has already been commissioned and phase two is due 
to be completed later this year. 
Dabhol has come under fire because of the relatively high cost of its power. 
Critics object to Dabhol charging INR7.1 a kilowatt-hour for its power, 
compared with INR1.5/KWh charged by other suppliers. 
-By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427; 
himendra.kumar@dowjones.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


India: Lenders stop funds to Dabhol

04/21/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, April 20. LENDERS to the Dabhol power project seem to have added 
another knot to the much-entangled Enron story. They have suspended 
disbursements to Dabhol Power Company (DPC) because of the on-going 
"payments" stand-off between it and the Maharashtra State Electricity Board 
(MSEB), sources told Business Line. 
A DPC spokesman, however, denied that disbursements have ceased and 
reiterated that the project is on schedule with 90 per cent construction 
complete. He declined to disclose the quantum already advanced by lenders.
According to DPC's agreement with lenders, once the political force majeure 
clause of the power purchase agreement (PPA) is invoked, the company's 
payment obligation to bankers is suspended. 
Enron can also claim insurance from the Export Import Bank of the US on 
account of political expediency, as per clause 15 of the PPA. 
When asked about it, the Enron spokesman declined comment. 
The project's second phase has a total debt of close to $1.3 billion. 
Of this, about $290 million is in domestic currency, $460 million of ECAs and 
$487 million from commercial banks. International commercial banks have a 
39.37 per cent exposure and Indian institutions 23.52 per cent, according to 
sources. 
According to sources, lenders have stopped advancing funds for the second 
phase due to the uncertainty pervading it. Lenders can, as per their 
agreement with DPC, stop releasing funds if there is a default. 
A default on bills by the purchaser of power (MSEB) can be considered as a 
"deemed default" on loans. 
It is not clear from when the funds flow stopped except that it happened some 
time this year. Even though MSEB first defaulted on payments to DPC late last 
year, lenders did not consider it a serious enough to stop funds. But, with 
MSEB refusing payments and the Governments and DPC adopting a hawkish stand, 
lenders decided to stop advancing funds to the project. Sources said the 
company met with domestic lenders a couple of days ago. Creditors are 
understood to have expressed their concern at the continued stand-off between 
DPC, MSEB and Governments. 
Enron has now convened a meeting in London of all lenders to the project, 
domestic and foreign, on April 23 to take stock of the situation and apprise 
them of their future course of action. 
The $3-billion DPC project has a 70:30 debt-equity ratio. Of its $1.9 billion 
debt, 65 per cent is in rupees while the rest is dollar-denominated. 
There are over 30 banks and institutions, Indian as well as foreign, that 
have sunk money in the project. Domestic financiers include IDBI, SBI, ICICI 
and Canara Bank while major foreign ones are ABN Amro, ANZ Grindlays, 
Standard Chartered Bank and Citibank. 
Our Bureau

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


DPC board meet on Apr 25 to decide Dabhol fate in London

04/21/2001
Press Trust of India Limited
(c) 2001 PTI Ltd.

Mumbai, Apr 21 (PTI) Marred by controversies since its inception, the 
US-based energy major Enron-promoted Dabhol Power Company (DPC) board will 
meet on April 25 in London to decide the fate of its 2,184 mw project in 
Dabhol in the western Indian state of Maharashtra, including winding up of 
its operations. 
"The top most item on the agenda is to empower DPC managing director Neil 
McGregor to wind up operations in the country", state government sources told 
PTI here Saturday.
When contacted DPC spokesperson declined to comment on the agenda of the 
London meeting and added, "I will not like to comment on speculations". 
Sources said a team comprising three top officials of Maharashtra State 
Electricity Board (MSEB) including chairman Vinay Bansal would attend the 
high-profile board meet. 
Bansal told PTI that MSEB has decided to give a "fitting reply" and present 
its case concerning the Rs 4.01 billion penalty that the loss-making board 
slapped on DPC on February 28, for not generating required power within the 
stipulted time as per the Power Purchase Agreement (PPA). 
This London meet comes two days after the international and domestic 
financial institutions sit together (April 23) to discuss DPC's future course 
of action in the wake of non-payment of dues to the tune of Rs 2.23 billion 
by MSEB and also to take into account the aforesaid penalty. 
Over the payment of Rs 1.02 billion and Rs 1.11 billion dues of December 2000 
and January 2001 respectively, sources said, both the state government and 
MSEB had offered to make a "protest payment" as per the PPA, but DPC, India's 
first fast track power project, refused to accept it on that condition. 
Currently, Enron India holds 65 per cent stake in the USD 900 million DPC 
project, which includes MSEB's 15 per cent, while General Electric and 
Bechtel hold 10 per cent each. 
The controversial "now on now off" project began in 1992 but ran into rough 
weather after the Shiv Sena-Bharatiya Janata Party combine came to power and 
was scrapped only to be revived after renegotiating the PPA. 
Fresh trouble arose in October last when MSEB began defaulting over the 
"enormous" billing following which DPC invoked the state and Indian 
government's counter guarantee and also sent three international arbitration 
notices recently invoking political "force majeure" implying inability to 
conform to any financial commitment. 
DPC had Friday stated that it had no plans to reduce its stake below 50 per 
cent at present but according to Enron Corp's Chief Executive Officer Jeff 
Skilling the company would be interested in talking to potential buyers. 
Skilling, according to an international financial daily, said the 
multinational continues to see strong growth in North America, Europe and 
Australia indicating a possibility of exiting from India. 
(THROUGH ASIA PULSE) 21-04 2001

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Enron may sell its stake in DPC.

04/21/2001
Business Times (Singapore)
(c) 2001 Singapore Press Holdings Limited

US power company may award mandate in a few days: report 
US-BASED energy company Enron Power Corp is putting in place plans to sell 
its majority stake in the troubled Dabhol Power Co in western India, reports 
said y esterday. 'Enron is believed to be in the process of appointing a 
merchant ban ker to sell its majority stake in the Dabhol Power Co (DPC),' 
The Economic Time s said. Leading investment banks are currently making 
presentations to Enron t o win the mandate, expected to be awarded in a few 
days. 'We are not currently
selling our stake in DPC,' an Enron spokesman said. Enron holds about 65 per 
c ent of DPC, the Maharashtra State Electricity Board (MSEB) has 15 per cent 
and two other US companies hold 10 per cent each. Enron is putting up a US$3 
billio n (S$5.4 billion), 2,184 megawatts power station in the town of 
Dabhol. The pr oject was signed in 1993. Construction began a year later. It 
was scrapped in 1 995 by the Maharashtra government when the BJP-Shiv Sena 
party was voted to pow er. Opponents accused Enron of bribery to win the 
contract. The state governmen t re-negotiated the power purchase agreement. 
Phase one began operating in 1999. In 2000, MSEB began defaulting on payments 
forcing Enron to invoke government 
counter-guarantees in January 2001. The Congress party, which had replaced th 
e BJP-Shiv Sena government, said the cost of Enron's power was 'unaffordable' 
a nd set up a panel to review the project. The panel said the power project 
agree ment should be renegotiated. - AFP.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


M and A
Enron may bail out of Indian power project
by Claire Poole

04/21/2001
The Daily Deal
Copyright (c) 2001 The Deal LLC

The Houston-based energy giant won't respond to reports it may dump its 
controlling stake in Dabhol Power, its controversial electricity-generation 
project in the western Indian state of Maharashtra. 
Houston energy giant Enron Corp. was mum Friday about reports it was looking 
to dump its controlling stake in Dabhol Power Co., its controversial 
electricity-generation project in the western Indian state of Maharashtra.
Indian business daily The Economic Times reported last week leading 
investment bankers were making presentations to Enron about its 65% interest 
in the $3 billion venture, which would value the company's stake at $1.9 
billion. 
"We don't have any comment," spokesman Johan Zaayman said. 
Other investors in the 2,184-megawatt power project include Fairfield, 
Conn.-based General Electric Co. and San Francisco-based Bechtel Group Inc., 
each of which own 10%, and the Maharashtra State Electricity Board, or MSEB, 
which owns 15%. 
Under the original plan, MSEB was going to pick up 15% from Enron when it 
kicked in additional funds to finance the second phase of the project, which 
would cost $1.3 billion and was scheduled to come on line in December. 
But in November, MSEB said it could not buy the additional stake because of 
financial difficulties caused by the fall of the rupee and rising energy 
prices. So in January, Enron said it had hired Credit Suisse First Boston to 
help it find a buyer for that 15%. 
After MSEB defaulted on $48.2 million in electricity payments, whispers grew 
louder that Enron wanted to sell its entire stake. 
To do so, Enron must get approval from its lenders, who were scheduled to 
meet with the company Monday in London to talk about the status of the 
project. 
Zaayman confirmed there was going to be a status meeting, but would not 
comment further. 
This is not the first time Enron has run into trouble with the Dabhol 
project. 
In 1995, the then-state government controlled by two Hindu fundamentalist 
parties, the Bharatiya Janata and the Shiv Sena, decided to suspend the first 
phase of the project and cancel the second phase. Enron was also accused of 
bribing officials to win the contract. 
Six months later, work resumed on the first phase and a contract was signed 
for the second. The bribery charges against Enron were dismissed, and the 
project was allowed to proceed. 
Dabhol is not the only Indian venture from which Enron is trying to extricate 
itself. 
On Oct. 18, the company confirmed it was considering shedding its interests 
in the Panna-Mukta oilfield and Tapti gas field off India's west coast to 
raise money for new projects, again hiring CSFB as adviser. 
Interested parties have included Indian Oil Corp. and Oil and Natural Gas 
Corp., a partner in the assets. The deal was originally expected to close 
this month. 
Dabhol is one of several Enron deals around the world that are crumbling. 
On April 19, Romanian state oil company SNP Petrom said an Enron unit, Enron 
Capital BV, was handing back its 50% stake in their natural gas marketing 
joint venture, Petrom-Enron Gas SRL, because of operational difficulties. 
Terms weren't disclosed. 
SNP Petrom claims Enron left the venture after failing to handle gas imports 
for SNP as planned. It said Enron complained it could not access Romania's 
gas pipelines to handle the imports. 
Enron didn't return calls seeking comment about the debacle. The 10-year 
joint venture was established in 1998. 
Enron's $3.1 billion sale of Portland, Ore., utility Portland General 
Electric to Sierra Pacific Resources of Reno, Nev., also appears to be in 
jeopardy. 
With Nevada canceling its electricity deregulation plan and putting a 
moratorium on power plant divestitures April 18, analysts think Sierra 
Pacific may not be able to raise enough money to pay for the acquisition. So 
Enron will have to look for another buyer. 
Potential candidates include ScottishPower of Glasgow, Scotland; Northwest 
Natural Gas Co., also of Portland, and Duke Energy Corp. of Charlotte, N.C. 
Given the difficulties Enron has had with the Dabhol project, a pullout would 
not be surprising. 
On Sept. 9, Enron Chairman Kenneth Lay said at an energy conference in 
Houston the company planned to sell off its assets outside North America and 
Europe and reinvest the proceeds into its $1.3 billion expansion into 
broadband telecommunications in the U.S. 
A sale of Enron's interest in the Dabhol power project would go a long way 
toward reaching that goal. 
http://www.thedeal.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.