Enron Corp of the U.S. said it has pulled out of the Dolphin gas project and agreed to transfer its 24.5 per cent equity to the UAE Offsets Group (UOG) for an undisclosed amount. UOG will thus own 75.5 per cent of Dolphin Energy Ltd (DEL). TotalFinaElf will continue to hold 24.5 per cent.

UOG has begun negotiations with several energy majors to take up equity in DEL and will sell in due course, Chairman Ahmed Ali Al Sayegh said. Enron said it bowed out because there was not much value it could add at this stage and it did not fit into Enron's core business.

"As the project has evolved, it has evolved into a strong up-stream and gas transportation and delivery project. Enron is not an upstream company," said Richard Bergsieker, president and chief operating officer for Enron M.E.

"It was provided earlier in the agreement that at this stage we would decide whether to go ahead or not. We got involved because it was an integrated project, upstream and market development and we thought we could impart marketing and finance structuring skills. We brought some of this so far.

"We would be happy to join hands with the group for future ventures that are in line with our core business activities." Al Sayegh said Enron made a significant contribution during the formative stages and the project is now at an advanced stage. The partners have decided to bring in new companies.

"Negotiations have started with a number of international players keen to become shareholders in DEL. All international energy companies working in the Gulf are interested and we are contacting them formally from tomorrow."

Patrick Rambaud, TotalFinaElf's director-general of exploration and production, said his company was keenly interested in increasing its equity in DEL and has formally made an expression of interest.

"TotalFinaElf has not reduced a single interest in the project. All our expertise is being put to take the project forward. This project fits perfectly with our strategy for long-term presence in these countries and the development of all activities along the energy chain."

DEL was set up last July to implement the Dolphin gas project after the signing of a project development agreement between UOG, Enron and TotalFinaElf in March 2000. The project involves the development of gas reserves in Qatar's North Field and the transportation of two billion cubic feet per day of natural gas to the UAE and Oman in its $3.5-$4 billion first phase.

DEL is inviting engineering and construction management companies to pre-qualify for five contracts. Al Sayegh said UOG and Qatar Petroleum are aiming to sign a development and production sharing agreement by the third quarter. "The latest date for the signing will be September. We are shooting for an earlier date."