INSIDE TRACK - Back in the saddle for a rough ride - INTERVIEW KENNETH LAY, ENRON.
Financial Times, 08/30/01
California Energy Alliance to Fight for Direct Access Utilities: Group may go to court to keep customers who want to choose their own power provider.
Los Angeles Times, 08/30/01
French Power Spot Market to Start in October
The Wall Street Journal Europe, 08/30/01
UK: Enron trades UK St Fergus beach gas online.
Reuters English News Service, 08/30/01
Enrononline To Offer Gas For Delivery At UK's St Fergus
Dow Jones Energy Service, 08/30/01
India: Assets of Dabhol Power Company: Whose property are they anyway?
Business Line (The Hindu), 08/30/01

India's Godbole on Enron's Offer to Sell, Power Thefts: Comment
Bloomberg, 08/30/01

Oman LNG Denies Report of Delay in Shipment to India's Dhabol
Bloomberg, 08/30/01

Briefs: Settlement ends lawsuit over Azurix
Houston Chronicle, 08/29/01

Judge rejects Enron request to halt legislative subpoena
Associated Press Newswires, 08/29/01
Calif Judge Says Enron Must Comply With Document Subpoena
Dow Jones Energy Service, 08/29/01
Azurix, Enron Settle Holder Suit Over $275 Mln Buyback Offer
Bloomberg, 08/29/01



INSIDE TRACK - Back in the saddle for a rough ride - INTERVIEW KENNETH LAY, ENRON.
By SHEILA MCNULTY.

08/30/2001
Financial Times
(c) 2001 Financial Times Limited . All Rights Reserved

INSIDE TRACK - Back in the saddle for a rough ride - INTERVIEW KENNETH LAY, ENRON - The US energy group's chairman tells Sheila McNulty of the job facing him after the sudden departure of the com. 
A3ft elephant,a gift from the Indian government, stands under a spotlight outside the office of Kenneth Lay. That the head of Enron, US energy titan, has not seen fit to remove this reminder of a protracted battle with one of India's state electricity boards - one of the most painful episodes in Enron's history - is testament to his thick skin.
Was this imperviousness lacking in Mr Lay's hand-picked successor? Earlier this month Jeffrey Skilling resigned as chief executive after six months in the job, citing "personal reasons". The men had known each other well. They had worked together for more than a dozen years, first when Mr Skilling was a consultant with McKinsey and then side by side since 1990, when Mr Lay persuaded him to join Enron. 
Mr Lay was surprised at his protege's premature departure but the 59-year-old has slipped easily back into his former job as chief executive, while continuing as chairman. He acknowledges that he might have explored Mr Skilling's personal issues more thoroughly before handing him the job. 
"I knew quite a bit about his personal life and his family life and his kids and all," Mr Lay says. "I think some of these personal and family issues evolved, or certainly became much more important even, since he became chief executive. Maybe I should have probed him a little bit more about that area of his life but until something like this happens you don't really think about that." 
Both men have declined to say precisely what led to Mr Skilling's departure. The company is not facing financial difficulties. In the 15 years Mr Lay was chief executive, Mr Skilling helped him to transform Enron from a regional natural gas pipeline company into a leading electricity, natural gas and communications company. Its market capitalisation rose from $2bn to $70bn. The company reported revenue of $101bn ( #70bn) in 2000. 
Yet there is plenty to trouble the occupant of the chief executive's office. Enron is embroiled in a public controversy over a power plant in India and a separate battle with the authorities in California and has faced difficulties building its broadband business. Mr Lay says the situations in India and California have "stabilised" and the company has taken steps to cut its losses in broadband. Enron has decided to end the unhappy episode in India by selling the power project. And it is one of several energy traders facing questions in California over accusations of a manipulation of power prices - something it denies. 
These issues have weighed on the stock price, which has fallen 54 per cent since the start of the year. Mr Lay says that might have influenced Mr Skilling's decision to leave. The main motives, he insists, were "personal and family issues" that Mr Skilling could not put off dealing with for two or three years. "Did he feel quite a bit of pressure from the standpoint of the stock price going down and did he internalise that more than he needed to? Probably so," Mr Lay says. 
So how does Mr Lay keep the next chief executive from doing the same? How does he ensure that person will not let personal issues force him out? Maybe, he says, he will probe a bit more. "But it's kind of like fighting the last war. I think this is an unusual situation." 
Nonetheless, Mr Lay has decided to take more time over the appointment. "There is no big rush," he says. He himself will remain chief executive for as long as it takes to find the right person for the job. He spent days, or weeks at the most, before settling on the 47-year-old Mr Skilling. This time, he may well spend years in the search. 
"The board has made it very clear that we are going to take our time. I have extended my contract through 2005. I'll stay that long if needed. I'll stay longer if needed. But we're going to take our time. We're going to make sure that we make the right choice," Mr Lay says. "We're going to make sure that the financial community agrees that that would be the right choice. We're going to make sure that, obviously, the employees and the organisation believe that is going to be the right choice." 
He started the process on Tuesday by appointing Greg Whalley, president and chief operating officer of Enron Wholesale Services, and Mark Frevert, chairman and chief executive of Enron Wholesale Services, to the office of the chairman. Mr Whalley was also promoted to president and chief operating officer of Enron, while Mr Frevert was promoted to vice-chairman of the company. The men are on the short-list for chief executive, though Mr Lay will continuously review the ranks for other candidates. After all, the job of chief executive is a difficult one. 
"The demands on a chief executive have been much greater than they used to be and, in fact, I think maybe part of it is just the fast-paced world we live in, where we have so much information and everything is instantaneous," Mr Lay says. "Everybody knows what a company's performance is, what it is going to be, what it should have been before. In many cases, the pressure itself gets to people." 
More importantly, he adds, if the company is not performing well, boards are not as patient as they used to be and shareholders do not want them to be. He says this was not so with Mr Skilling, who left on his own terms and therefore without a severance package. Mr Lay does not make a scapegoat of Mr Skilling for any of the company's problems, insisting that the men made strategic decisions together. 
He says, however, that he will try to provide more information about the company to analysts, who have complained about keeping up with fast-growing Enron as it moves into new areas and markets. That will mean segmenting its businesses more to make apparent where growth is and what returns on invested capital Enron is getting in various businesses. Mr Lay says he does not know whether Mr Skilling communicated as well as he intends to. 
"I think Jeff is a good communicator. But, as I say, we probably have different styles. Certainly I will see if my style will work any better now ...I expect it is a little bit more relaxed than his probably is - probably, in part, because I've been in this position before and for quite a while. I try not to internalise or personalise any criticism or comments." 
Certainly that keeps the focus on running the company. Mr Lay says his next replacement will be a strong leader in and outside the company: someone well versed in Enron and its various businesses, who lives its values and is able to express the company's strategies and vision, as well as its progress. "And just by the nature of this job, somebody who has got great endurance, who really shows that they can operate at a very high level consistently, over a long period of time," he says. 
"Because it also is a job that does carry with it certain demands and pressures and if you don't have that endurance, sometimes you have a tough time continuing the pace. 
"I personally think Jeff had all of the skills he needed to be a great chief executive and I think that except for these personal and family issues, if he had stayed here long enough he would have been a great chief executive," Mr Lay says. 
"But we'll never know for sure, will we?" 
(c) Copyright Financial Times Ltd. All rights reserved. 
http://www.ft.com.

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

Business; Financial Desk
California Energy Alliance to Fight for Direct Access Utilities: Group may go to court to keep customers who want to choose their own power provider.
NANCY RIVERA BROOKS
TIMES STAFF WRITER

08/30/2001
Los Angeles Times
Home Edition
C-2
Copyright 2001 / The Times Mirror Company

Electricity marketers said Wednesday that they may sue state utility regulators over their latest plan to end customers' ability to shop around for power. 
The marketers, which compete with the traditional utilities to sell power to business and residential customers, said they were stunned by a draft decision by the California Public Utilities Commission to suspend "direct access" retroactively to July 1. The marketers have been rushing to sign up new customers in recent weeks, assuming that the PUC decision would not take effect before Sept. 1.
The PUC, in issuing the proposal Monday, said it seeks to protect the flow of revenue that will be used to repay $13.4 billion in bonds the state intends to sell to pay for electricity. 
The draft decision--as well as other bond-related measures scheduled before the PUC on Sept. 6--is expected to generate a parade of lawsuits, any of which could delay the issuing of the bonds. 
The commissioners and state lawmakers fear that a flight of customers, especially large businesses, from the traditional utilities would saddle the remaining consumers with an unfair burden in paying off the bonds. The money raised by the bonds will be used to pay for power the state is buying on behalf of Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric. 
Direct access was a key element of the 1998 deregulation of the state's power market because it ended the utilities' retail monopolies. 
But the state Legislature, worried that too many customers would abandon utility service, passed legislation this year directing the PUC to suspend the program. 
PUC Administrative Law Judge Robert Barnett moved the suspension date back to July 1, arguing that customers and marketers had been given ample time to prepare for the suspension since Gov. Gray Davis signed the legislation in February. 
Such a retroactive suspension would be an unconstitutional government abrogation of existing contracts and seizure of private property without just compensation, said Daniel W. Douglass, a Woodland Hills lawyer representing the Alliance for Retail Energy Markets. 
The group, which includes electricity marketers such as AES NewEnergy, Enron, Green Mountain Energy and Calpine, is preparing a lawsuit should the PUC adopt the draft decision, Douglass said. 
"We believe retroactivity is fundamentally unfair to both direct access customers" and marketers, he said. 
"We are not trying to delay the bonds. We think they are very important," Douglass said. "We think the state has created a self-inflicted injury by instituting retroactivity."

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

Global Finance
French Power Spot Market to Start in October
By Sarah Wachter
Dow Jones Newswires

08/30/2001
The Wall Street Journal Europe
24
(Copyright (c) 2001, Dow Jones & Company, Inc.)

PARIS -- Euronext Paris SA is planning an October launch for a spot electricity market for France that will be called Powernext, a person who works in the industry and was close to the negotiations said. 
When it starts, up to 12 companies will trade on Powernext, including some of the current partners in Powernext and U.S. groups Enron and TXU Europe Power Trading, the person said. Physical electricity will be traded in hourly blocks for delivery the following day, using the same El-Web trading platform and price-configuring system of Nord Pool, the power market operator for the Nordic region, the person said.
Daily volumes on Powernext are expected to reach 24 gigawatt-hours within six months of the launch, and annual volumes should reach 15 terawatt-hours in 2002, the person said. That annual volume represents about 13% of total electricity consumed by French industrial consumers that are eligible to switch suppliers. 
Starting early next year, Powernext will also provide weather information, including temperature data for French towns and cities, as a service to members, the person said. Data on temperatures and precipitation is vital for electricity trading decisions. Electricity consumption is highly dependent on the weather because it can't be stored. 
Euronext holds 24% of Powernext, and HGRT, a financial holding for European electricity grid operators, holds 17%. The remaining 49% is divided equally among French banks BNP Paribas and Societe Generale, state-owned Electricite de France, oil giant TotalFinaElf and Belgian utility Electrabel.

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



UK: Enron trades UK St Fergus beach gas online.

08/30/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Aug 30 (Reuters) - U.S.-owned utility Enron said on Thursday it had started trading gas at the St Fergus terminal in northern Scotland on its online system. 
The company is offering to trade St Fergus beach gas for winter periods Q4 2001 and Q1 2002 but only for an hour between 1130 and 1230 local time, it said in a statement.
St Fergus is the largest gas terminal in Britain, handling gas from many North Sea fields. 
Beach gas is offshore gas and purchasers will be responsible for paying entry capacity, or access rights, to bring the gas onshore into the national pipeline system. 
Enron, which already trades gas at the notional national balancing point (NBP) online, decided to expand to St Fergus to increase liquidity in the short-term beach gas market, said Peter Crilly, head of UK gas at Enron. 
"St Fergus is not a liquid market. It is the location where entry is the biggest issue - there are constraints getting gas from St Fergus to the south where demand is," Crilly told Reuters. 
Enron is bidding to buy winter gas at St Fergus at between two and 3.5 pence below NBP prices and will sell it at a discount between 0.7 and two pence, the prices reflecting the cost of buying entry capacity. 
St Fergus beach gas trades in the over-the-counter market but volume is tiny compared with NBP trade.

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

Enrononline To Offer Gas For Delivery At UK's St Fergus

08/30/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LONDON -(Dow Jones)- Enron Europe Ltd. (U.ENE) Thursday will start offering natural gas for delivery at the St Fergus terminal in Scotland on its Internet trading platform Enrononline, said Peter Crilly, the company's head of U.K. gas. 
"We hope to help provide liquidity and transparency in prices throughout the winter, he told Dow Jones Newswires.
Prices for gas to be delivered at the Scottish terminal in the fourth quarter 2001 and the first quarter 2002 will be posted daily between 1030 GMT and 1130 GMT, he said. 
Enrononline has so far enabled traders to exchange gas for delivery at the National Balancing Point, a notional point on the pipeline network, the most common delivery point for the majority of U.K. gas trades. 
The announcement follows the completion late Wednesday of the first tranche of pipeline operator Transco's pipeline entry capacity auctions for the period October 2001-March 2002. 
-By Germana Canzi, Dow Jones newswires; +44 20 78429283; germana.canzi@dowjones.com

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

India: Assets of Dabhol Power Company: Whose property are they anyway?

08/30/2001
Business Line (The Hindu)
Fin. Times Info Ltd-Asia Africa Intel Wire. Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd. All Rights Res'd

DPC is a nexus of property rights of several lenders and shareholders. 
Though Enron's claims are financial in nature, they are subordinate to that of DPC's lenders. If DPC fails in meeting its obligations to its lenders, Enron is liable to meet the unfulfilled obligations in proportion to its holding. After meeting the liability along with other shareholders, it merely remains the dominant shareholder of DPC, says G. Ramachandran and A. Srikanth.
IT IS customary in India to begin public debates with an "at-the-outset" disclaimer based on reasoned neutrality. We assert at the outset that we have no partisan position to take in the dispute that involves the Dabhol Power Company (DPC), Enron, the Government of Maharashtra and the Government of India. However, the statement made by Mr Kenneth Lay, chairman, Enron, an energy company based in the US, provides an opportunity for an examination of the principles and practices pertinent to the ownership of corporate assets and the rights and claims of investors. 
Mr Lay has been reported to have said that US laws could prevent the US Government from providing any aid or assistance to India if the property of US companies were expropriated. His statement on US laws on the expropriation of US property may be based on his assumption that the assets of DPC are US property. Such an assumption pertinent to the ownership claims and assets of DPC is implicit in his provocative statement. 
Since Enron owns 65 per cent of DPC's equity stock, his statement raises two critical questions: Are the assets of DPC the property of Enron? Are the assets of DPC US property? Answers to these are important because of the growing globalisation of economic activity and the rapid growth in the ownership of economic assets by companies promoted by global corporations. Moreover, India has a well-established policy of enabling significant investments by foreign companies in companies incorporated in India. 
Independent legal status 
Every corporation, from a perspective based on the theory of the firm propounded by Professors Michael C. Jensen and William H. Meckling, is a nexus of contractual claims and rights. The corporation owns the assets; managers deploy the assets to produce cash flows. 
The corporate form of organisation bestows upon a firm a legal status that is independent of its lenders and shareholders. Since they supply financial capital, their claims are principally financial in nature. 
Companies own the assets and the suppliers of capital have a claim on the cash flows in a pattern that is predetermined by the contractual claims. Laws in India, North America, European Union, Australia, New Zealand, Singapore and South Africa unambiguously reflect the independent legal status of incorporated entities. 
Corporate assets, contractual rights and pecking order Mr Lay has provoked a debate on the ownership of corporate assets. 
The debate extends to the nature and scope of the contractual claims held by shareholders and creditors in a modern environment that separates ownership of corporate assets from the managerial control of corporate assets. 
Contractual claims govern the financial and non- financial rights of shareholders and creditors. Shareholders have the right to choose the corporation's managers by a vote and to set the corporation's business goals and policies. The managers determine the deployment of corporate assets and operating plans aimed at running the business profitably. 
To balance the interests of lenders against such an important economic right, lenders have the first claim on a company's after-tax cash flows. Lenders also have a first claim on its assets if obligations are not met when they fall due. Claims of lenders and creditors precede the claims of equity shareholders. The shareholders of the corporation have a claim on the residual cash flows, but only after the claims of lenders and creditors have been met. 
Lenders and creditors find a place higher than shareholders in the pecking order in the financial affairs of corporations. Lenders have the right to nominate one or directors, to impose important covenants on the disposition of assets, and to determine the actions that may be necessary when a corporation fails to meet its financial obligations. 
DPC and global suppliers of capital 
DPC is, in our view, both a domestic corporation and a global corporation. 
It is a domestic corporation because it is incorporated in India. 
It has been incorporated with unlimited liability and this has important implications and repercussions for its global shareholders, and Enron, in particular, since it is the dominant shareholder. 
DPC is a global corporation since it has accessed capital from global sources of equity and debt. The equity sources include investors such as India's Maharashtra State Electricity Board (MSEB) and General Electric's Japanese subsidiary. MSEB holds 15 per cent of DPC's voting stock. Other global investors, including the subsidiaries of Bechtel and General Electric, hold the remaining 20 per cent. DPC has an array of domestic and global lenders. Thus, DPC is a nexus of contractual rights and not all rights are vested with institutions based in the US. 
Limited and unlimited liability of shareholders 
The liability of a company to its lenders has an impact on its shareholders. 
The nature of incorporation determines the impact. The liability of shareholders of a company incorporated with limited liability is limited to their equity investment in that company. They are not obligated to meet any residual dues owed to the company's lenders, bondholders and other creditors. 
Shareholders of a limited liability company can walk out of a company in default. The assets of the company may be reconfigured to meet the claims of secured creditors and then the other unsecured creditors, in that order. If the proceeds from the reconfiguration of assets are insufficient, the risk of default is borne by the company's creditors. 
In contrast, the liability of the shareholders of a company incorporated with unlimited liability is not limited to their equity investment in that company. Shareholders are obligated to fully compensate the company's lenders and bondholders and meet the unredeemed and unpaid claims of other creditors including suppliers, employees and governments. 
Shareholders of a company incorporated with limited liability enjoy a high level of protection that is not offered to shareholders of a company incorporated with unlimited liability. Hence, all other things being the same, shares in a limited liability company are more valuable than that in an unlimited liability company. DPC has been incorporated with unlimited liability in India. It is our conjecture that DPC was incorporated with unlimited liability at the insistence of the local government. 
DPC and contractual rights 
We now turn to answering the two principal questions. DPC's status as an unlimited liability company is reckoned with. First, are the assets of DPC the property of Enron? The assets of DPC are that of a separate legal entity. DPC is a nexus of property rights of several lenders and shareholders. Lenders enjoy precedence over shareholders, and Enron is one of four shareholders though it is the dominant shareholder. 
Enron's claims are financial in nature, but the claims are clearly subordinate to that of DPC's lenders. If DPC fails in meeting its obligations to its lenders, Enron is liable to meet the unfulfilled obligations in proportion to its holding. After meeting the liability along with other shareholders, it merely remains the dominant shareholder of DPC. It does not become the owner of the assets of DPC. 
Second, are the assets of DPC US property? If the right of lenders to determine the actions when DPC fails to meet its financial obligations is accepted legally, it may be argued that lenders can gain legal control over DPC's assets. Since DPC has domestic and global lenders, the vesting of legal control would not be confined to lenders in the US. A part of the assets of DPC may be deemed to be US property, but only if Enron and other shareholders do not fulfil their obligations. 
However, Mr Lay may have reckoned with the opportunistic application of laws relating to corporate assets and liabilities in India. The case of Union Carbide India Ltd (UCIL), a company incorporated with limited liability in India, comes to mind. Mr Warren Andersen, the chairman of Union Carbide in the US at the time of the Bhopal gas tragedy in December 1984, was taken into custody when he landed in India. 
Mr Andersen had exercised volition when he travelled to India after the fatal leak to commiserate with the people of India, but was held responsible for the actions of UCIL. The actions of the Government of India in 1984 were seen to be based on assumptions that were incompatible with the separation of ownership and control and with UCIL's status as a separate Indian entity in which Union Carbide of the US was a shareholder. 
Mr Lay may yet anticipate adverse action against Enron if something unfavourable was to happen, and DPC was seen as the cause. Hence, he may have feared as well as hoped that DPC was Enron's property and, as a result, US property. His quick retraction has confused many. 
Some may have been lulled into complacency. The resolution of the ambiguity in contractual claims and property rights in a global environment is critical to India's economic future. Mr Kenneth Lay, chairman, Enron, has done us a favour by provoking a debate. 
(G. Ramachandran is a financial analyst. A. Srikanth is an associate consultant with Satyam Computer Services Ltd; the views expressed by him are personal.)

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


India's Godbole on Enron's Offer to Sell, Power Thefts: Comment
2001-08-30 06:03 (New York)


     Mumbai, Aug. 30 (Bloomberg) -- Madhav Godbole, the chief
negotiator in a payments dispute between Dabhol Power Co., Enron
Corp.'s local unit, and the Maharashtra State Electricity Board,
comments on Enron plan to sell the project and on power thefts
in the country.

     ``Enron wants back its equity. It's not big sacrifice
they're making. They're in fact asking for the moon.
     ``Enron will have to take a drastic reduction on their
equity as well. All stakeholders will have to take a hit'' on
their share capital and loans.

     Enron has said it's willing to sell to the government its
stake in Dabhol at cost. It's owed $64 million in unpaid bills
by the electricity board, its only customer. The board in May
stopped buying power, saying it's too expensive.

     ``The (federal) government should give (Maharashtra) state
government 250 billion rupees ($5 billion) in loans, which it
could use to pay back foreign currency loans'' used to fund the
$3 billion project, India's biggest foreign investment.

     ``You can't have loans linked to the U.S. dollar. It raises
the cost of power.'' The Indian rupee has depreciated by about 5
percent annually against the U.S. dollar in the past.

On electricity thefts:

     ``There must be political courage to implement the law of
land rigorously. Only then will you see things changing.

     ``But it appears that we take decisions only when things
reach crisis proportions. A crisis-like situation will have to
arise before we find a solution to the problem.''

     The World Bank estimates 18 percent of the power generated
in India is stolen, compared with 8 percent in China.

On using meters to curb thefts:

     ``There are pros and cons to the argument metering will
help reduce thefts.
     ``Farmers in Maharashtra alone use as many as two million
water pumps. How will you monitor or reads bills every month.
It's not going to be easy.

     ``There's nothing wrong in selling subsidized power to
farmers as long as the tariff covers fixed costs. It must be
revenue-neutral.''

     The government has set December as a deadline to complete
metering of all consumers.

On the proposed electricity law:

     ``The new Electricity Bill 2001 is an improvement over
policies followed in the past. Ultimately the states will have
to get people to pay for power they use.

     ``There will have to be political preparedness, which is
not evident today. Passing a law won't take us anywhere; you'll
have another law in the statue book.

      ``It's a question of what happens in practice -- on the
ground. We decided seven years ago to charge farmers a minimum
50-paise per unit. Still, states like Punjab and Tamil Nadu sell
electricity to farmers for nothing.''

On doubling India's generation capacity:

     ``The Power Minister wants to double India's capacity'' to
200,000 megawatts in next ten years. ``But where is the demand''
for more power?

     ``Eight states showed interest in buying Enron power. But
they needed 1,300 megawatts and only during times of peak demand
and at a particular price.

     ``Today the revenue from selling additional unit of power
is less than the cost of producing it. State electricity boards
don't want it.''

     ``It's time the government gets out of power business all
together and leaves it to private power producers and generators
to decide amongst themselves.

     ``There must be one regulatory body to ensure tariffs fixed
are reasonable and solve payments and other disputes. Let that
be the rule of the game.''


Oman LNG Denies Report of Delay in Shipment to India's Dhabol
2001-08-30 05:53 (New York)


     Muscat, Oman, Aug. 30 (Bloomberg) -- Oman LNG LLC, in which
Royal Dutch/Shell has a 30 percent stake, said it is only revising
a tentative date for making its first delivery of liquefied
natural gas to India's Dhabol Power Co. rather than delaying the
shipment, as a paper reported today.

     Dhabol Power, in which the U.S.'s Enron Corp. owns a 65
percent stake, signed a 20-year agreement with Oman LNG in 1998 to
take 1.6 million tons a year of liquid gas, and set October this
year as a possible start date for deliveries, said Julian Barnes,
a spokesman for Oman LNG. Bahrain's Gulf Daily News had reported
that the first shipment was delayed to February from November.

     The facilities for receiving the gas at Dhabol will not be
ready until early next year, Barnes said. ``There's no delay. The
original start date was set nearly three years ago, so it was just
an estimate which was always open to change.''

     Dhabol, which cost $1 billion to build, is locked in a
payments dispute with the local Maharashtra state government that
owes it $45 million in bills, according to London's Financial
Times. Oman LNG remains committed to supplying Dhabol, its second-
largest customer after Korea Gas Corp., Barnes said.

     Oman LNG, which made its first-ever delivery last April, is
seeking to refinance as much as $1.3 billion of debt, including
selling $500 million of bonds, the company's chief executive,
Graham Searle, said in an interview on Tuesday. Investor concern
over the Dhabol contract could reduce appetite for the debt.

     The majority state-owned company, in which France's
TotalElfFina has a 5.54 percent stake, is also considering
building a third production line to add to its 6.6 million tons a
year capacity, Searle said.



Aug. 29, 2001, 11:49PM
Houston Chronicle
Briefs: Houston & state 
Settlement ends lawsuit over Azurix
WILMINGTON, Del. -- Shareholders of Azurix Corp., a wastewater services management company, settled a lawsuit Wednesday over parent Enron Corp.'s $275 million stock buyback offer last year. 
Houston-based Enron said in October 2000 it would pay $7 for each of Azurix's outstanding shares to take the unit private. In seven lawsuits filed in Delaware Chancery Court in Wilmington, stock owners said the shares were worth more. 
After negotiations among lawyers, Enron agreed to increase the price to $8.375 per share, adding $52.5 million. The transaction was completed in March. 



Judge rejects Enron request to halt legislative subpoena
By JENNIFER COLEMAN
Associated Press Writer

08/29/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SACRAMENTO (AP) - A Sacramento Superior Court judge rejected energy company Enron's request to quash a subpoena issued by a state Senate committee investigating possible price manipulation in California's energy market. 
Judge Charles Kobayashi denied two of Enron's three motions Wednesday in tentative rulings, saying the court had no right to interfere with a legislative subpoena.
Enron sued the Senate Select Committee to Investigate Market Manipulation in July to stop the subpoena of its financial and electricity trading records. Among its objections were that only the Federal Energy Regulatory Commission has the authority to investigate wholesale markets. 
The committee has sought documents from six energy companies as they investigate last year's price spikes in the wholesale electricity market. 
In his tentative ruling on Enron's motion asking for a protective order, Kobayashi said he was "sympathetic to Enron's concern for safeguarding its trade secret information." 
But he added that the court couldn't assume the committee would divulge the confidential documents and Enron's constitutional rights weren't "jeopardized by delivery of their secrets to the document depository." 
On the other motion, to quash the subpoena, the judge found the committee did follow proper procedure when serving Enron officials. 
Attorneys for the committee and Enron will return to court Thursday on the tentative rulings. Kobayashi set a court date for Sept. 7 on the third motion, which is a request for an injunction of the committee's investigation and contempt proceedings. 
Enron spokeswoman Karen Denne declined to comment on the tentative ruling until after Thursday's hearing. 
In a similar case Wednesday in San Francisco Superior Court, a judge said he would consider protections for Enron documents subpoenaed by Attorney General Bill Lockyer. Lockyer is also investigating possible price manipulation of the energy market. 
"In the attorney general case, we were granted the protective order," Denne said. "It's basically on the same issue, over a subpoena for documents." 
Lockyer spokesman Nathan Barankin said the judge will consider safeguards to keep the documents confidential, such as a secure document repository where investigators could see the documents. But the judge also said Enron can't deny the information to the attorney general, Barankin said. 
Enron, Barankin said, failed in its attempt to find a legal way to deny Lockyer access to information to guide an investigation. 
Lockyer's staff and Enron plan to meet this week to work out the details of the protective order and the judge could review that by next week. 
Enron officials have said the company is prepared to turn over 25,000 documents that were already in California, but that other documents the committee wants are in Texas and out of the panel's reach. 
The committee found Enron in contempt for not turning over the documents. A full report on the contempt finding has been sent to the full Senate, which has not voted on it. A contempt report on Reliant Energy has also been sent to the Senate. 
A contempt finding against Mirant Corp. was later reversed when the company opened a document depository in Sacramento for the committee's investigators. 
If the full Senate imposes sanctions against Reliant or Enron, it will be the first time since 1929, when the Senate voted to jail reluctant witnesses during a committee investigation of price fixing and price gouging allegations involving cement sales to the state.

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

Calif Judge Says Enron Must Comply With Document Subpoena

08/29/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LOS ANGELES -(Dow Jones)- A Sacramento Superior Court judge issued a tentative ruling Wednesday that Enron Corp. (ENE) must comply with a subpoena of financial documents by a state Senate committee investigating electricity market manipulation, according to court records. 
Enron argued that the subpoena should be void because the company is headquartered out-of-state in Houston. The judge said, however, that a company's residence wasn't a relevant issue for legislative subpoenas.
The judge also denied a request by Enron for a protective order for documents it provides the committee. He said he was "sympathetic" to Enron's concern for safeguarding its trade secret information, but that issuing a protective order would constitute an unacceptable intrusion into the Legislature's activities. The judge will hear arguments Thursday. 
Enron said it would be happy to comply with the committee's subpoena as long as it receives a protective order. The company intends to argue that it should be granted the order because a San Francisco Superior Court judge granted one Wednesday in a separate investigation by the state attorney general, company spokesman Mark Palmer said. 
"The San Francisco judge said we must have a protective order agreed on by both Enron and the attorney general's office, and we will use that to argue for one in the Senate committee investigation as well," Palmer said. 
The committee has already cited Enron and Reliant Energy Corp. (REI) with contempt for refusing to provide documents, a charge for which the companies could be fined. 
The chairman of the Senate Select Committee To Investigate Market Manipulation said his panel was happy about the Sacramento court's ruling. 
"We are pleased the court upheld the constitutional right of the Senate to proceed with an investigation directed at a legitimate legislative purpose," said Joe Dunn, D-Santa Ana. "We intend to aggressively pursue the investigation." 
The price manipulation committee's next meeting will be in early September. The panel will continue to hold hearings beyond the Legislature's Sept. 14 adjournment date, Dunn has said. 

-By Jessica Berthold, Dow Jones Newswires; 323-659-3872; jessica.berthold@dowjones.com

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


Azurix, Enron Settle Holder Suit Over $275 Mln Buyback Offer
2001-08-29 18:26 (New York)

Azurix, Enron Settle Holder Suit Over $275 Mln Buyback Offer

     Wilmington, Delaware, Aug. 29 (Bloomberg) -- Shareholders of
Azurix Corp., a wastewater services management company, settled a
lawsuit over parent Enron Corp.'s $275 million stock buyback offer
last year.

     Houston, Texas-based Enron, the No. 1 energy trader, said in
October 2000 it would pay $7 for each of Azurix's outstanding
shares to take the unit private. In seven lawsuits filed in
Delaware Chancery Court in Wilmington, stock owners said the
shares were worth more.

     After negotiations among lawyers, Enron agreed to increase
the price to $8.375 per share, adding $52.5 million. The
transaction was completed in March for $327.5 million.
     Shareholders said in court papers they decided to settle the
consolidated lawsuit because accepting the added price per share
was ``in the best interests'' of stockholders.

     The agreement requires approval by a judge at a Nov. 16
hearing. Shareholders' lawyers say they'll seek $2.25 million in
legal fees and expenses.

     Enron took Houston-based Azurix public in June 1999 at $19
per share. It decided to buy back the stock because Azurix was
having trouble with plans to win large water contracts and buy
rivals, and the share value had fallen more than 80 percent.

     Three weeks ago, Voorhees, New Jersey-based American Water
Works Inc., the No. 1 publicly traded U.S. water utility, said it
would buy the Azurix North America unit for $149.8 million in cash
and debt. Enron said other Azurix assets also will be sold.

     Shares of Enron, which reported $100.7 billion in fiscal 2000
sales, fell 86 cents to $37.30.