Online college library and research firm slows pace, reduces staff by almost 
half 
Houston Chronicle, 05/09/01

Markets / Your Money Mixed Day Waiting for Fed's Act Wall St.: The Dow falls 
51.66 points to 10,883.51, with Nasdaq rising 25.20 to 2,198.77. Long-term 
yields rise on below-par productivity report.
Los Angeles Times, 05/09/01

JAPAN: Japan power market not fair for newcomers-Enron.
Reuters English News Service, 05/09/01

Enron Official: Japan Needs Independent Power Regulator
Dow Jones International News, 05/09/01

UK: INTERVIEW-U.S. Williams enters Europe energy markets.
Reuters English News Service, 05/09/01

INDIA: Enron moves execs families out of India - paper.
Reuters English News Service, 05/09/01

India: Dabhol: MSEB denies capacity underutilisation
Business Line (The Hindu), 05/09/01

NO PRESSURE FROM INDIAN FEDERAL GOVT ON ENRON ISSUE: MSEB
Asia Pulse, 05/09/01

MSEB ropes in HC judge as arbitrator
The Economic Times, 05/09/01

SJM demands probe into Enron deal
The Times of India, 05/09/01

Plans for more power from Uran unlikely: MSEB
The Times of India, 05/09/01

Enron: Preparing for pull out?
The Times of India, 05/09/01

Dabhol lenders willing to back PPA termination
Business Standard, 05/09/01

Prize Petroleum eyes Enron stake in Panna, Mukta
Business Standard, 05/09/01







May 9, 2001
Houston Chronicle
Online college library and research firm slows pace, reduces staff by almost 
half 
By TOM FOWLER 
Copyright 2001 Houston Chronicle 
Questia Media laid off half of its work force Tuesday in an effort to reduce 
costs. 
The developer of an online library and research site for college students cut 
139 jobs as it begins to slow down the pace at which books are added to the 
site. 
Founder Troy Williams said the company is finding it too hard to raise enough 
additional cash from investors to justify the pace at which it was adding 
books. 
"Customers have said they're generally satisfied with the number of books 
that are on the site right now, so it's a good time to slow down," Williams 
said of the 35,000 books currently available. "A significant number of our 
people were involved in that process." 
At one time, Questia employed more than 300 workers but cut back to about 280 
in recent weeks. The layoffs will leave the staff at about 140. 
No senior vice presidents are leaving as part of the layoffs, but Williams 
said a number of vice presidents and director-level employees have been cut. 
Laid-off employees will receive eight weeks of pay and 60 days of benefits, 
Williams said. 
"We've tried to be as humane as we could about the whole thing," Williams 
said. 
Williams said Questia's layoffs are not a result of the company growing too 
large too fast. 
"It took that many people to launch the service," Williams said. "But since 
we're not digitizing books that quickly, we just don't need that many." 
Questia was started in 1998 by Williams with the backing of investors such as 
Compaq Computer Corp. co-founder Rod Canion and Enron Chairman Ken Lay. 
The company raised more than $135 million over the past two years to build an 
online searching and note-taking interface and so far has purchased the 
rights to digitize more than 60,000 books. The company charges students about 
$20 per month for unlimited access and pays publishers based on the number of 
page views their books get from students. 
The site went live in early January but had trouble attracting the number of 
subscribers the company originally hoped for. 
In early April, following an intense television ad blitz during the National 
Collegiate Athletic Association's men's basketball tournament, the company 
had slightly more than of 1,000 paying subscribers, sources close to the 
company say. 
Company officials always said building the subscriber base would be an 
expensive long-term project. 
Several adjustments in strategy over the 14 weeks since the service launched 
indicate the original plans weren't panning out. 
On-campus membership drives were shifted first from community colleges to a 
handful of large major universities, a television ad campaign was launched 
months earlier than expected, while an early mascot was pushed into the 
background in favor of a simpler marketing message. 
The changes in strategy appear to be paying off as subscribership has jumped 
significantly in recent weeks. 
Williams wouldn't discuss the numbers, but sources say that figure has topped 
5,000. 
"We've had a fivefold increase in the number of paying subscribers in the 
past two weeks alone, which is a significant proof point in students' 
willingness to pay for such a service," Williams said. 
The company has offered the service free to nearly 100,000 students and 
faculty at four universities in recent weeks, an effort that is expected to 
bear fruit in new subscribers next fall. 
With current subscriber growth projections, he said the company is expected 
to have a positive cash flow in about 18 months. 
Questia is expected to close on another round of funding from a group of 
investors in several weeks. 
"We're very sanguine about the future," Williams said. "We have to buckle 
down over the summer. We're a very cyclical business, so we're not going to 
make great strides over the summer." 




Business; Financial Desk
Markets / Your Money Mixed Day Waiting for Fed's Act Wall St.: The Dow falls 
51.66 points to 10,883.51, with Nasdaq rising 25.20 to 2,198.77. Long-term 
yields rise on below-par productivity report.
From Times Staff and Wire Reports

05/09/2001
Los Angeles Times
Home Edition
C-4
Copyright 2001 / The Times Mirror Company

Key indexes finished mixed Tuesday but more stocks rose than fell as Wall 
Street struggled for direction ahead of the Federal Reserve's meeting next 
week. 
In the bond market short-term yields fell further, and long-term yields 
inched up after the government's disappointing report on first-quarter worker 
productivity.
The Dow Jones industrials eased 51.66 points, or 0.5%, to 10,883.51, the 
fourth loss in five sessions, as the 11,000 mark again proves to be a barrier 
for the blue-chip index. 
But the Nasdaq composite index rose 25.20 points, or 1.2%, to 2,198.77 as 
semiconductor and computer networking stocks rose ahead of Cisco Systems' 
quarterly earnings report, released after regular trading ended. 
Cisco's operating results slightly beat estimates, but the company reported a 
massive net loss as it wrote down the value of excess inventory. Cisco 
shares, which rallied $1.13 to $20.38 in regular trading, fell to $19.90 in 
after-hours activity. 
In the broad market Tuesday, winners edged losers by 21 to 17 on Nasdaq and 
by 16 to 14 on the New York Stock Exchange. Trading volume was moderate. 
Some analysts were impressed by the market's strength, especially in the wake 
of the downbeat productivity report. 
The government said worker productivity fell at a 0.1% rate in the first 
quarter, the first decline in five years. The report, though not entirely 
unexpected, raised fears about inflationary pressures in the economy. 
Productivity gains had helped hold inflation to a minimum in the late 1990s. 
Long-term Treasury bond yields rose modestly Tuesday as traders registered 
their concern about inflation's trend. 
The 10-year T-note yield ended at 5.24%, up from 5.19% Monday. 
But shorter-term yields continued to slide as traders bet that the Fed, which 
meets Tuesday, will cut its key short-term lending rate for a fifth time this 
year. 
The six-month T-bill yield slid to a new two-year low of 3.69% from 3.72% 
Monday. 
Though the central bank may lower short-term rates further, the productivity 
report "increases the likelihood that the Fed will have to reverse course 
next year," raising rates to contain inflation, Henry Willmore, chief U.S. 
economist at Barclays Capital, told Bloomberg News. 
Among Tuesday's market highlights: 
* Financial stocks remained under pressure on concerns about loan losses and 
weaker borrowing in the struggling economy. American Express fell $1.93 to 
$41.30 after Morgan Stanley downgraded the stock. 
J.P. Morgan Chase fell $1.45 to $47.75, Bank One lost 94 cents to $37.46 and 
Northern Trust fell $1.49 to $64.71. 
* Chip stocks were strong, led by PMC-Sierra, up $4.79 to $44.10; Vitesse 
Semiconductor, up $2.60 to $36.25; and Broadcom, up $2.24 to $44.53. 
But among personal computer stocks, Dell lost $1.08 to $24.83 after 
announcing new job cuts. 
Dell rival Compaq fell 27 cents to $16.83 and Apple Computer eased 39 cents 
to $24.57. 
* Among blue chips, 3M fell $1.54 to $116.36. Chief Executive James McNerney 
said at 3M's annual meeting that there are "no signs" the global economy will 
turn around any time soon. 
* Utility and energy-trading stocks were weak. Enron fell $1.93 to $56.11, 
Orion Power lost $1.04 to $28.76 and NRG Energy fell $1.64 to $31.07. 
* 
Market Roundup: C7, C8

GRAPHIC-CHART: Daily Diary: Tuesday, May 8, 2001; 

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


JAPAN: Japan power market not fair for newcomers-Enron.

05/09/2001
Reuters English News Service
(C) Reuters Limited 2001.

TOKYO, May 9 (Reuters) - U.S. energy giant Enron Corp said on Wednesday that 
Japan's newly deregulated power market lacked competition and contained 
barriers that were deterring new entrants. 
"There's no real competition in the power market," Nicholas J.O'Day, vice 
president of Enron Japan Corp told reporters.
A number of unnecessary regulations, the high costs of the transmission 
network and other factors have thwarted attempts by newcomers to enter the 
power market, he said, adding that more reforms were needed. 
New entrants have to borrow the transmission network system from power 
utilities when they try to enter the market, but it was hard to judge whether 
the transmission fees reflect real costs, he said. 
Since March last year, non-utility firms have been allowed to begin supplying 
power to large-lot commercial users, ending a monopoly by Japan's 10 power 
utilities. 
The move was aimed at lowering electricity rates, which are much higher than 
in most Western economies. 
Yet the ratio of newcomers in the power market now stands at at only 0.2 
percent of the total. 
Enron also said that it would be necessary for Japan to set up an independent 
regulator to promote more competition in the power market. 
"It's OK if the Ministry of Economy, Trade and Industry (METT) could act as a 
regulator," he said, but added that METI's traditional relationship with 
power utilities may prevent it from being a fair regulator. 
Enron, North America's biggest buyer and seller of electricity, set up its 
first joint venture in Japan in 1999, named "E Power". Enron Japan itself was 
set up last May. 
In March, Enron presented plans to build a liquefied natural gas (LNG) fired 
power plant in northern Japan, aiming to become the first foreign company to 
build such a plant in Japan.

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


Enron Official: Japan Needs Independent Power Regulator

05/09/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

TOKYO -(Dow Jones)- Japan's power industry needs a strong independent 
regulator in order to become truly competitive, an Enron Japan Corp. official 
said Wednesday. 
"Japan is in a new global environment now. It requires new structures for its 
economy," said Nicholas J. O'Day, vice president at Enron Japan, a 
wholly-owned subsidiary of the Houston-based Enron Corp. (ENE).
While he said that the existing Ministry of Economy, Trade and Industry might 
rise to fill the role, he expressed concerns that the ministry would be able 
to serve an impartial role given the historical relationship between it and 
the incumbent utilities. That relationship might make it difficult for the 
ministry to objectively treat new entrants to the power field, he said. 
Launched in April 2000, Enron Japan is focusing its business on areas such as 
electricity trading and marketing, and trading in weather derivatives, 
nonferrous metals and financial products. It has also said it plans to 
introduce broadband services in Japan. 
"Contrary to popular belief, Enron is not out to destroy the existing Japan 
utilities," O'Day said. 
Rather, he said, Enron maintains that increased liquidity is a vital factor 
to bring about a competitive environment. 
Enron is basing its conclusions on a report by U.S.-based Brattle Group, 
O'Day said. The consultancy was commissioned by Enron to assess the state of 
Japan's power industry and make suggestions for reform. 
The Brattle report will be released May 15 at an Enron co-sponsored seminar 
in Tokyo called, "Reassessing Power Deregulation."

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


UK: INTERVIEW-U.S. Williams enters Europe energy markets.
By Stuart Penson

05/09/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, May 9 (Reuters) - U.S. energy company Williams is gearing up for a 
push into Europe's deregulating gas and power markets where it will focus on 
trying to sell its expertise in trading and risk management to local 
utilities. 
Williams will launch a European operation in London next week with an initial 
staff of 25 trading energy in the UK, German, Scandinavia and the Benelux 
region, the London unit's managing director told Reuters in an interview on 
Tuesday.
"The majority of our business will be around structured transactions to 
assist utilities in maximising the value of their assets," said Tim Loposer. 
Williams in Europe would at a later stage expand into trading crude oil and 
refined products, he said. 
GROWING BAND OF U.S. TRADERS IN EUROPE 
Williams is the latest addition to a growing band of U.S. energy companies 
setting up offices in London, a location they see as the ideal base from 
which to tap into Europe's potentially lucrative energy markets. 
Free trading in gas and power is gaining momentum across the European Union 
as markets open up to competition in line with EU directives on 
liberalisation. 
UBS Warburg in a recent report estimated profits from gas and power trading 
this year in Europe would amount to $1.9 billion, rising to $2.4 billion next 
year. 
Companies such as El Paso Energy , Duke Energy , ENRON AEP and TXU Europe are 
already building trading books in the UK and mainland Europe. 
"We are trying to differentiate ourselves from the other U.S. companies that 
have come to Europe," said Loposer. "We are not just a trader and we are not 
a utility, or a significant owner of generation," he said. 
Unlike some of its U.S. rivals, Williams was not planning to acquire physical 
assets, such as power stations, in Europe, said Loposer. 
"What we are looking for are incumbent utilities which are looking for a 
partner to help extract value from their assets," he said. 
"We take care of the physical commodity risk as well as the financial risks, 
we are very comfortable doing this," said Loposer, adding the strategy in 
Europe essentially would mirror the company's approach in the U.S. 
Williams approach will be based on the use of structured deals, or 
combinations of different trading tools like futures and options. 
Loposer said the company also would look to bring to Europe experience from 
the U.S. market of tolling deals, which involve delivering fuel to power 
stations and then marketing the power generated. 
SOUTHERN EUROPE AN EARLY TARGET 
Loposer said his team already was targeting Spain and Italy in its search for 
risk management contracts. 
"We are very close to some announcements, there are three or four deals that 
may come through," he said. 
"Clearly southern Europe has strong growth," said Loposer. "The divestments 
are happening there and the fundamentals are fairly strong. That said, we 
have learned that things can change overnight," he added.

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


INDIA: Enron moves execs families out of India - paper.

05/09/2001
Reuters English News Service
(C) Reuters Limited 2001.

BOMBAY, May 9 (Reuters) - Families of executives overseeing U.S. energy giant 
Enron Corp's troubled Dabhol Power Company (DPC) project in India are leaving 
the country, possibly signalling an intention to terminate the nearly 
complete $2.9 billion project, an India newspaper said on Wednesday. 
The Times of India said the children of Enron executives had been pulled out 
of the American School in Bombay as their families were being relocated to 
Singapore.
It also said security around the expatriate executives had been tightened, 
and personal bodyguards assigned to senior executives. 
But the unsourced report said it was not clear if the decision to move the 
families out of Bombay was made by Houston-based Enron, or reflected personal 
decisions made by the executives themselves. 
A spokesman for Dabhol Power Co, the operator of the nearly complete 2,184 MW 
power plant south of Bombay, told Reuters it was company policy not to 
comment on administrative and personnel matters. 
The newspaper said security had been tightened because "there is likely to be 
a tremendous backlash against representatives of the U.S.-based energy 
company" if the project was terminated. 
It said "more than 15,000 jobs in Dabhol will be lost if a decision is taken 
either to terminate the project or stop construction on Phase II". 
The project is mired in controversy after the Maharashtra State Electricity 
Board (MSEB) reneged on its commitment to buy all the power produced by the 
giant plant, saying it is too costly. 
MSEB has also defaulted on monthly payments to DPC for the electricity it has 
taken, forcing the company's board last month to authorise the management to 
terminate the contract.

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


India: Dabhol: MSEB denies capacity underutilisation

05/09/2001
Business Line (The Hindu)
Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - 
Asia Intelligence Wire

MUMBAI, May 8. OFFICIALS of the Maharashtra State Electricity Board (MSEB), 
in a presentation made before the Maharashtra Electricity Regulatory 
Commission (MERC), today refuted claims that the board underutilised its own 
capacity to justify power purchase from Enron's Dabhol Power Company. 
Members of Prayas, a non-government organisation, in a petition filed with 
MERC, had accused MSEB of flouting merit order dispatch of load shedding to 
justify DPC phase II.
They had also said the State would have 2000 MW of excess power if hydro 
power was fully utilised and MSEB's Uran plant was used at full capacity. 
MSEB officials explained that the board could not use hydro electricity 
beyond its current capacity. 
"DPC power was drawn by and large to remedy low frequency conditions as the 
supply from other sources was not sufficient," a senior MSEB official said in 
his presentation. 
The officials said the Uran plant was being underutilised due to lack of LNG 
availability. 
The use of furnace oil as feedstock would cost the board Rs 16,000 per tonne, 
resulting in per unit costs of Rs 4, the official said. 
The board was already making optimum use of its thermal power capacity. 
According to an official, 95 per cent of DPC power was used to sustain 
frequency as per the Indian Electricity Grid Code. 
"Load shedding has always been carried out in consultation with the Western 
Regional Load Dispatch Centre," he said. 
- Our Bureau

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


NO PRESSURE FROM INDIAN FEDERAL GOVT ON ENRON ISSUE: MSEB

05/09/2001
Asia Pulse
(c) Copyright 2001 Asia Pulse PTE Ltd.

NEW DELHI, May 9 Asia Pulse - The Maharashtra State Electricity Board (MSEB) 
has said that there is no pressure from the federal government on the state 
government to continue its agreement with US energy giant Enron-promoted 
Dabhol Power Company (DPC). 
MSEB in a letter to the federal governemt denied news reports which suggested 
that that the deal with Enron could have been scrapped by the state 
government but for "pressure" from the federal government.
(PTI) 09-05 1657

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


MSEB ropes in HC judge as arbitrator

05/09/2001
The Economic Times
Copyright (C) 2001 The Economic Times; Source: World Reporter (TM)

THE MSEB on Tuesday appointed a former Bombay High Court judge ML Pendse as 
its arbitrator, reports Girish Kuber in Mumbai. The formal announcement about 
Mr Pendses appointment is expected by Wednesday.
Enron already has appointed its arbitrator. According to government sources 
once the two parties complete their formalities for appointing an arbitrator, 
the case will be tried in London. According to the PPA the dispute resolution 
clause states that disputes should be referred to an expert for technical 
matters. 
And in other cases, the resolution should be by reference to arbitration to 
be conducted under the New York Convention of 1958 and to be located in 
London. 
MSEB had delayed the monthly payments of electricity bills from October last 
year and subsequently defaulted on payments, claiming that the cost of power 
produced by DPC was exorbitant. It also slapped two penalty bills of around 
Rs 800 crore on Enron for failing to generate electricity within the 
stipulated time period of three hours. 
Enron subsequently has invoked state guarantees, counter-guarantees and 
political force majeure, and then went on to invoke the arbitration clause. 
Meanwhile, the Madhav Godbole panel is yet to receive the names of the 
members of Enrons lenders and share holders who will be attending the first 
meeting with the state government panel on May 11. 
The Godbole panel has been appointed with a mandate to renegotiate the PPA 
with DPC. 
Though Enron has accepted the invitation, it has made it clear that it is 
meeting the panel as a courtesy and it should not seen as its willingness to 
renegotiate the PPA.

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


SJM demands probe into Enron deal
The Times of India News Service

05/09/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

The Swadeshi Jagran Manch (SJM), an arm of the RSS, has demanded a judicial 
probe into the Enron deal, while investigating the role of politicians and 
bureaucrats in the controversy-ridden power project. 
Ramesh Seth, convener of SJM, Mumbai and Anil Gachke, convener of SJM's 
national action group on power, have alleged that while examining the 
feasibility of the project, inflated and fabricated figures of demand for 
power were given by those in power.
When pointed out that this would mean an examination of leaders like Gopinath 
Munde, Sharad Pawar and Balasaheb Thackeray, Gachke said that a probe should 
be instituted irrespective of political affiliations. 
Gachke said the SJM would not budge from their stand of cancellation of the 
deal. Seth, a qualified engineer, had predicted on behalf of the Manch that 
Enron power would cost Rs seven per unit in 1996, which was way higher than 
the actual cost of power. 
To make people aware of the issue, they have organised a seminar 'Enron
-review and thereafter', which will be held today at Ghia Hall, Kala Ghoda at 
2 pm.

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


Plans for more power from Uran unlikely: MSEB
Business Times Bureau

05/09/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: The Maharashtra State Electricity Board has stated to the Maharashtra 
Electricity Regulatory Commission (MERC) that MSEB's plans to generate more 
power from its idle Uran plant in order to avoid expensive Dabhol power, are 
unlikely to materialise due to the high costs involved. 
In a hearing that took place on Tuesday, against a petition filed by SR 
Paranjpe, MSEB officials made it clear to the Commission that it has to pay 
Rs 16,000 per tonne for furnace oil to Rashtriya Chemicals & Fertilisers 
(RCF) which makes the power costlier from Uran.
This was because as per the plans worked out by the Union ministry of 
petroleum and natural gas, MSEB can avail of additional natural gas from GAIL 
by diverting the gas allocated to RCF. In turn, the Board is expected to pay 
up the differential price to RCF. But MSEB, in its reply to a question during 
the hearing, stated that fuel (furnace oil) for RCF costs Rs 16,000 per tonne 
and if the differential price is to be borne by it, then the cost of power 
generated from the Uran plant will be over Rs 4 per unit. This, the Board 
claims, will make it an unviable proposal to be implemented. 
However, the petitioner has challenged this claim made by MSEB and MERC has 
asked to present written submissions before the Commission this week. 
MSEB's Uran plant has a capacity of 913 MW, but only around 300 MW is being 
generated due to lack of natural gas. This arrangement, initiated by the 
ministry to offer more natural gas to MSEB, follows a representation made by 
CM Vilasrao Deshmukh last month. 
Currently, MSEB has been allocated only 1.6 mmtpa natural gas from GAIL since 
the output from ONGC's Bombay High has depreciated in the recent past, said 
sources. Union petroleum minister Ram Naik had earlier announced that the 
ministry would take all efforts to allocate more natural gas to Uran. 
The petition had challenged that MSEB had violated the merit order despatch 
and purchased more power from Enron violating the limits set by MERC in its 
May 5 order. The Commission will issue an order soon after the petitioners 
submit their affidavits responding to MSEB's reply to the charges made 
against them.

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


Enron: Preparing for pull out?
Pradipta Bagchi

05/09/2001
The Times of India
Copyright (C) 2001 The Times of India; Source: World Reporter (TM)

MUMBAI: Is Enron preparing to pull out of India? Officially, the answer's 
``no''. But in a significant move, the families of the expatriate executives 
working in its subsidiary, the Dabhol Power Company (DPC), have been shifted 
out of Mumbai and relocated to Singapore. 
In addition, the security cover for expatriate executives working in DPC has 
been tightened, including personal bodyguards for senior executives.
According to sources, the families have been shifted from Mumbai and the 
children of these executives studying in the American School in Bandra-Kurla 
have been pulled out. An American School spokesperson refused to comment when 
asked about this. 
An Enron spokesperson, when contacted, also declined to comment. "It is our 
corporate policy not to comment on personnel and administrative matters," he 
said. 
It is not clear if the decision to move the families out of Mumbai was taken 
at the corporate level in DPC or whether the decision has been a personal one 
taken by the expatriate executives themselves. 
About 15 expatriate officials are working in DPC as part of the management 
and operations team. 
According to the sources, uncertainty over the fate of the $2 billion project 
has led Enron's expatriate executives to move their families out of Mumbai. 
This is because in the event of the power project being terminated in the 
next few weeks, expatriate officials feel that there is likely to be a 
tremendous backlash against representatives of the US-based energy company. 
Over 15,000 jobs in Dabhol will be lost if a decision is taken either to 
terminate the project or to stop construction work on phase II of the DPC 
project. 
The security around the expatriate officials still working to salvage the 
project in Mumbai has been tightened. In addition, some of the senior DPC 
officials have been allocated security personnel to act as their bodyguards. 
The Enron spokesperson said that the company had just moved its premises to a 
new building in the Bandra-Kurla complex and the security needs of the 
company have changed. "We have no extra security than is absolutely 
necessary", he maintained. 
It is unclear what will be the fate of the project, with Kenneth Lay, the 
chairman of Enron Corp, using his veto power to dissuade the Enron board from 
terminating the project earlier this week. 
A team of Enron executives is scheduled to meet the government next week to 
discuss the reccommendations of the Godbole Committee, set up to review the 
power purchase agreement by the Maharashtra government.

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


Dabhol lenders willing to back PPA termination
Our Banking Bureau Mumbai

05/09/2001
Business Standard
1
Copyright (c) Business Standard

The Maharashtra government's tough stance, combined with the Centre's silence 
on honouring its counter-guarantee for December last year which has been 
invoked by the Dabhol Power Company, has left the lenders to the project with 
no choice but to say yes to DPC's plan of serving the power purchase 
agreement termination notice. 
"If the governments (Centre and state) do not come forward to resolve the 
crisis, it will be difficult for the lenders to convince the company to keep 
the decision of terminating the PPA in abeyance. We had got a three-week 
reprieve and we will not be in a position to stretch it further," said a 
source among the lenders. The deadline expires on May 15.
At the DPC board meeting in London in the last week of April, the resolution 
on PPA termination was passed by a 7:1 vote. The lone voice of dissent was 
that of the representative of the Industrial Development Bank of India on the 
DPC board. 
The three Maharashtra State Electricity Board representatives were not 
allowed to vote since they were an interested party. 
"At best, the lender's representative will abstain from voting at the next 
meeting. We have no moral rights to oppose the move," said another source. 
The only positive development for which the lenders can claim credit for is 
MSEB's payment of Rs 134 crore, that too, under protest. 
"The escrow account with Canara Bank has not yet been activated. A string of 
clearances has been pending with the state government. The Centre is also not 
willing to honour its counter-guarantee. The lenders have not been able to 
achieve any thing," sources added. 
DPC had invoked the political force majeure clause in its contract with the 
board. MSEB is now arguing that the invocation of this clause has absolved 
DPC of all its liabilities. 
The DPC board authorised the managing director of Enron India to issue a 
notice for terminating the power purchase agreement to MSEB and the state 
government. 
Serving of the notice requires backing of the lenders who have an exposure of 
about $200 crore in the project.

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


Prize Petroleum eyes Enron stake in Panna, Mukta
Sidhartha New Delhi

05/09/2001
Business Standard
1
Copyright (c) Business Standard

Prize Petroleum Company Ltd has decided to enter the oil and gas production 
sector by trying to acquire the 30 per cent Enron equity in the Panna, Mukta 
and Tapti fields in western offshore and has valued Enron's equity at around 
Rs 600 crore. 
Prize Petroleum, in which Hindustan Petroleum Corporation Ltd (HPCL) holds 50 
per cent equity, will invest Rs 1,900 crore in the project. Of this, Rs 1,300 
crore will be the debt component and the balance will be in the form of 
equity.
Prize Petroleum, in which ICICI has 45 per cent stake and HDFC 5 per cent, is 
in talks with a number of banks to raise the debt portion of the investment. 
Sources told Business Standard that a substantial portion of the debt has 
already been finalised and the balance is expected to be clinched shortly. 
This will be Prize Petroleum's maiden foray into the oil sector. Its 
promoters had decided to go in for only the discovered fields where risks are 
low. As a result, it refrained from participating in the two rounds of 
exploration acreage offered under the new exploration licensing policy. 
Of late, Enron has been uncomfortable operating the three offshore fields 
which had been awarded to the Enron-Reliance consortium in 1995. Late last 
year, it announced its intention to pull out of the project and invited bids 
to farm out its portion of the equity. 
The award of the three fields to the consortium was the subject of prolonged 
controversies, both inside and outside Parliament. It was ultimately cleared 
by the Supreme Court when the apex court rejected a public interest 
litigation against the award. 
An estimated $696 million has been spent on the development of Panna and 
Mukta. It is learnt that the consortium has put up three well-head platforms 
in the two fields which are estimated to have 146 million barrels of oil 
reserves. Tapti is primarily a gas field. 
ONGC holds 40 per cent stake in this project with Reliance and Enron holding 
30 per cent equity each.

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