ELECTRICITY

Rumours have ENI stalking Enterprise Oil

The oil and gas rumour mill is in full swing again this week. Last week there were rumours that oil services company, Halliburton, was about to file for bankruptcy because of asbestos-related lawsuits. The Dallas-based company issued a number of press releases saying the rumours were completely unfounded.

Now this week we have mounting speculation that Italian oil and gas company, ENI, wants to take over UK company Enterprise Oil. Adding grist to the rumour mill was the visit of key executives from the Italian company to meet with investors in London this week.

"I declared only that Enterprise is a company interesting for ENI," said the chief executive of ENI, Mr Vittorio Mincato.

ENI, the world's sixth largest oil company's, has said it wants to raise its oil, gas and electricity output over the next four years in order to allow it to compete with the world's biggest oil companies.

News has emerged from Enterprise Oil that it had turned down a takeover approach with the Italian energy giant being the most likely suitor, according to industry watchers. "We are interested in companies that might bring more added value to ENI," said an ENI executive.

As one of the UK's few remaining independent oil firms, Enterprise Oil has been determined to avoid the consolidation which has swept through the rest of the industry.

Industry experts say the depressed share prices seen in recent months have made it cheaper for oil companies to expand through takeovers rather than organic expansion. Other names mentioned as possible suitors have included the Canadian firm Talisman Energy and the US firms such Amerada Hess and Conoco.

Enterprise Oil was founded from the main oil assets of British Gas and operates fields in the UK, Ireland, Norway, Denmark, Italy and the Gulf of Mexico.

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