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Wednesday, 28 November, 2001, 15:27 GMT
BG in India gas row
ONGC exploration activity
The Indian company has rejected the BG offer
India's Oil and Natural Gas Corporation (ONGC) appears to be blocking an attempt by BG to operate three oil and gas fields off the country's west coast.

The move raises questions over whether BG's deal to buy Enron's 30% stake - providing Enron with a much-needed $388m cash boost - will go through.

The deal was signed in October.

The Panna, Mukta and Tapti fields are jointly owned by ONGC, Enron and the local Reliance Industries.

Enron had operated the fields on its own.

"British Gas has come to us, and they have offered something, which is not sufficient for us to accept them as operators," an ONGC spokesman told the BBC's World Business Report.

"We want to operate the fields."

End in sight?

BG has tried to solve the dispute by offering ONGC the right to operate another field in Brazil if it withdrew its claim to operate the three fields in question.

In October BG Group chief executive Frank Chapman had stressed the importance of the Indian market to the group.

He added: "We see the building of gas markets in Gujarat and Maharashtra states as an important stepping stone in realising our long term goal of importing liquified natural gas through our Pipavav project."

"We are now driving hard to complete this new acquisition which will establish India as another core area of operations for the group," he added.

BG was demerged from Britain's former monopoly gas supplier, British Gas, four years ago.

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 ON THIS STORY
News image ONGC's Mohan Reddy
"We want to operate the fields"
See also:

10 May 01 | Business
BG profits rise sharply
21 Nov 01 | Business
Crisis fears hit Enron shares
11 Nov 01 | Business
Enron agrees deal with Dynegy
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