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UK: UPDATE 1-Scot Power in talks to buy Portland-sources
Reuters, 04/30/01 India State Panel Set Up To Rework Dahbol Power Pact Dow Jones, 04/30/01 SURVEY - ENERGY & UTILITY REVIEW: US edges closer to new energy policy Financial Times, 04/30/01 SURVEY - ENERGY & UTILITY REVIEW: Move to build a stronger base on alternative cleaner power Financial Times, 4/30/01 BRAZIL: UPDATE 1-Petrobras to buy Enron stakes in Brazil gas firms Reuters, 04/30/01 Petrobras to Buy Enron's Stake in CEG, CEG-Rio Gas Distributors Bloomberg, 04/30/01 Brazil/Petrobras/CEG -2: Price Tag Seen About $200 Mln Bloomberg, 04/30/01 Brazil Petrobras Seen Paying $240M For CEG Stake Dow Jones, 04/30/01 Brazil's Petrobras Agrees to Buy Enron's Stake in Natural Gas Distributor CEG Dow Jones, 04/30/01 Brazil Petrobras To Buy Enron's Stake In Gas Co CEG Dow Jones, 04/30/01 Foreign bids for Saudi gas projects passed on to Fahd's petroleum council Agence France-Presse, 04/30/01 UK: FACTBOX-LME membership changes over last 15 years Reuters, 04/30/01 GOLDEN TRIANGLE RESOURCES NL: Progress Report - Other (Part B : Section 02 Of 02) Australian Stock Exchange Company Announcements, 04/30/01 eZoka adds up for SMEs M2 Presswire, 04/30/01 Atlantic Quay Watch Bloomberg, 04/30/01 UK: UPDATE 1-Scot Power in talks to buy Portland-sources By Andrew Callus 04/30/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON, April 30 (Reuters) - Scottish Power Plc has held talks with Enron Corp about buying its Portland, Oregon-based power utility Portland General, a good geographic fit for the British group's existing U.S. arm PacifiCorp, industry sources said on Monday. "It's an obvious one and, yes, there have been discussions," said one source speaking after the official breakdown last week of energy trader Enron's talks to sell Portland to Nevada-based utility Sierra Pacific Resources Corp . PacifiCorp operates in six U.S. states including Oregon, and has its headquarters in Portland, the state capital. Utility holding company Sierra had been preparing to pay about $2 billion for Portland and assume $1 billion in debt. But the deal ran into trouble as the U.S. West Coast power crisis unfolded earlier this year, and talks were officially called off last Thursday. Reports that Britain's biggest utility may step in for Portland's 700,000 customer base and 2,000 megawatts of generating capacity surfaced at the weekend in Britain's Observer newspaper. PacifiCorp faces its own power crisis fallout, including $1 million a day buying-in costs resulting from the failure of one of its generators. The problems have helped depress Scottish Power's share price to a point where it now registers five percent UK sector underperformance over the past two years. And analysts said Portland has a significant exposure to current high U.S. power prices, with only about 2,000 megawatts of its own generating capacity but 3,700 megawatts of peak demand to satisfy. U.S. utility acquisitions are always fraught with regulatory difficulties and in this case an additional regulatory complication is that Portland owns a decommissioning nuclear power station. COST SAVING OPPORTUNITIES Nevertheless, Scottish Power has said it intends to expand further in the U.S. to exploit opportunities for merger cost savings in a highly fragmented market - The group's English rival National Grid Group was able to take out 40 percent of New England utility EUA's cost base by merging it with neighbouring power group NEES last year. Its current weak share price and lack of cash after the PacifiCorp buy has hindered development, but in March it made clear it might sell its UK water business, Southern Water. The proceeds are earmarked for acquisition purposes, and industry sources have put the price sought at 1.7-1.8 billion pounds ($2.4-2.6 billion). Enel of Italy has confirmed an interest. On Monday, Scottish Power was tightlipped. "We do not comment on market speculation," said a spokesman. But analysts said Portland was an obvious choice, given that it serves mainly the city of Portland and its surrounding area, in the middle of one of PacifiCorp's key markets. "It's hard to see them finding a better company to buy in terms of geographic fit and potential cost savings," said Peter Atherton of Schroder Salomon Smith Barney, who released a note last week pointing out the opportunity. But he is wary of the move. "On the surface selling Southern Water and acquiring PGE (Portland)... would appear attractive for SPW," said the research note. "However the loss of Southern Water's predictable earnings profile would, at least short term, put pressure on earnings and dividend cover." Scottish Power will face questions about Portland and Southern Water at its annual results presentations on Thursday this week. Analysts predict pretax profit before goodwill amortisation and exceptional items of 612-643 million pounds for the year to March 2001 down from 736 million a year earlier. Lower wholesale prices and regulatory price cuts on retail and distribution in the UK will more than offset the effect of a complete full year contribution from PacifiCorp, which only fed into Scottish Power's profits for four months in the previous year. A change to accounting practices which alters the way deferred taxation is treated will also account for about 40 million pounds of the profit fall, analysts said, with higher telecoms losses also a factor. India State Panel Set Up To Rework Dahbol Power Pact 04/30/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) NEW DELHI -(Dow Jones)- India's Maharashtra state government Monday appointed a nine-member committee to renegotiate the controversial power purchase agreement with the U.S. energy major Enron Corp.'s (ENE) Indian unit Dabhol Power Co., the Press Trust of India reported Monday. The government has asked the committee, headed by former federal Home Secretary Madhav Godbole, to attempt to negotiate a revised agreement within a month, the PTI said. The committee's goals are to bring down the power tariff and allow the sale of excess power to the federal government or its utilities, the PTI said. A restructure of Dabhol's stakeholding may also be on the agenda. The $3 billion, 2,184-megawatt Dabhol project has been mired in financial disputes after the Maharashtra State Electricity Board, its main customer, failed to pay several bills. The project has the largest single foreign investment in India. Texas-based Enron has a 65% stake in Dabhol Power, and is the project's largest shareholder. Other shareholders include the MSEB with 15% and General Electric Co. (GE) and Bechtel Enterprises (X.BTL) with 10% each. -By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427; himendra.kumar@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. SURVEY - ENERGY & UTILITY REVIEW: US edges closer to new energy policy: The recent power crisis in California has raised American awareness of the situation and the Bush administration seems to be more committed to the problem, writes David Buchan Financial Times, Apr 30, 2001 By DAVID BUCHAN The US is striving towards some kind of energy policy. When it eventually gets one, the impact on the rest of the world will be considerable. The long-term health of the world's biggest economy, depends on resolution of its domestic energy problems. It also has an impact on the market and climate generally as the world's biggest importer of oil and emitter of greenhouse gases. The US is also home to the world's largest private energy sector, but also has a government prone to use energy as a weapon of foreign policy. Through sanctions, Washington has kept its own companies out of certain oil-producing countries and tried to keep others out too. The only absolutely clear thing about the Bush administration's national energy policy is that it wants one. That itself is a change. Like governments in other industrialised countries, Washington has steadily retreated from the energy sector. It has moved from tight administration (fixing natural gas prices, for example) to loose regulation (shared, in electricity, with states and local governments). The US has a Strategic Petroleum Reserve, created after the 1970s oil shocks, and actually used it last year. In extremis, the US is also willing to go to war for oil, as it showed in the Gulf conflict 10 years ago. But the general sentiment was that the marketplace would provide a solution, and that energy problems, like bad weather and economic cycles to which they are related, could be relied on to fade away. This complacency has been blown away by the California power crisis, last year's run-up in world oil prices (partly due to US gasoline and heating oil shortages) and the arrival in the White House of a president and vice-president with a background in Texan oil. The Texas-based oil and gas industry tends to see the crisis as primarily one of supply. In the past 20 years, according to the American Petroleum Institute, US oil output has fallen from 8.57m barrels a day to 5.84m b/d. This is despite the fact that companies now drill deeper (to an average of 6,105 feet, compared to 4,512 feet in 1981), cheaper (average well cost of Dollars 769,000, compared with Dollars 855,000 in real terms in 1981) and better (a 80.3 per cent success ratio, compared with 69.6 per cent in 1981). During the same period, imports, both crude and refined product, have risen from 6m b/d to just over 11m b/d. Natural gas output has not fallen off to the same degree. But nor, in a sense, can it. Environmental factors have driven up demand for gas faster than for oil. Unlike oil, it cannot be imported by sea, except in the liquefied form that still accounts for only 1 per cent of US gas consumption. After the 1998-99 trough in activity, companies, spurred on by higher gas prices, are now pressing every available rig into service for drilling in the US and Canada. But they are having to run hard just to stay in place. Mark Pappa, Houston-based chief executive of EOG, formerly Enron Oil and Gas and now one of the most active drillers in North America, explains why. "We are now getting gas out of the ground faster than we can find it, because technology in accelerated extraction is advancing faster than in seismology," he says. As a result, the rate at which production declines as a share of the base is rising - from an average annual decline rate of 16 per cent in 1990 to 23 per cent in 1999. "In the Gulf of Mexico, decline rates can go up to 40 per cent a year," says Mr Pappa. So the industry is eyeing federal land. The federal government owns one-third of US land, but where, 20 years ago, 75 per cent of this was available for drilling leases, now only 17 per cent is. The industry hopes, with reason, that the Bush administration will reverse this trend. However, this will not be easy. The administration's plan to open up part of the Arctic National Wildlife Refuge (ANWR) to drilling has stirred strong opposition. There are obstacles elsewhere, too. While the federal government owns and could, in theory, lease the entire outer continental shelf for drilling, in practice California blocks exploitation of the Pacific, while Florida, even under Governor Jeb Bush, the president's brother, insists on keeping the drillers away from both its coasts. Companies would also like to make fuller use of what leases they have, says John Seitz, president of Anadarko. His company, currently North America's most active driller on 21m acres, is doubling operations in the Rockies, but often has to dismantle rigs temporarily during the wildlife breeding and tourist seasons. If access to resources is a problem, so is the infrastructure to get it to market. A new report, produced jointly by the Baker Institute in Houston and the Council on Foreign Relations in New York, points out how deregulation was initially smoothed by "surplus capacities along the entire energy chain, accumulated in the days of government-subsidised industry and falling demand". The excess capacity existed in refineries, tankers, pipelines, rigs, and, of course, in power generation. It allowed "expansion of energy use without significantly affecting underlying costs," says the report. The surplus capacity has largely vanished under the impact of deregulation, the accompanying price volatility that has made new investment risky and quite separate pressures from environmental regulation. Take oil refineries. Twenty years ago, the US had 315 of them with a combined capacity of 18.6m b/d and overall utilisation of 68.6 per cent. Last year, the country had 155 refineries with a 16.5m b/d capacity that was 92.6 per cent used. It is the same story with the nuclear reactors that provide 20 per cent of US electricity. Not a single new nuclear plant permit has been issued since 1979, the year of the Three Mile Island accident. But re-regulation is to blame for another handicap: the proliferation of regional gasoline standards, complicating refining and logistic problems and frequently causing local shortages and prices spikes. A single standard was never going to suffice in so large a country with, for instance, mile-high Denver requiring a less volatile fuel than low-lying Houston. But states and cities have increasingly used the 1990 Clean Air Act and the replacement of lead in fuel to demand that the oil companies provide them with differing cocktails of gasoline and diesel to suit their environmental needs. The upshot is that the oil companies are now asked to provide more than 100 different fuels. California, the north-east and the upper mid-west require gasoline reformulated to be more oxygenated and less smelly; Atlanta demands a lower sulphur and less evaporative fuel than the rest of Georgia; and garages in the two halves of the city of St Louis (because they are in two different states) have to sell different types of gasoline. The standards are unenforceable in the sense that drivers cannot be confined to a certain zone simply by virtue of what they carry in their tank. But this has not lessened local authorities' enthusiasm for them. In this area, as in that of electricity infrastructure, it is hard to see what the Bush administration can do to prevent such balkanisation without riding rough-shod over states' rights. Equally difficult, but even more pressing is to forge a single electricity transmission network to carry the huge amounts of power that are being traded across the country by commodity energy brokers, such as Enron and Dynegy. The federal authorities have slender means at their disposal. While it has sole authority over the natural gas trade and network, the Federal Energy Regulatory Commission (Ferc) has to share supervision of electricity trade with states which themselves have sole power to rule on the siting of power plants and lines. Deregulation has made the latter task harder. In the days of local monopolies, people knew that at least a power plant - however ugly - in their backyard would be serving their needs. But in today's world of competitive long-distance power trading, the plant could be lighting, cooling or heating the other end of the country. Nonetheless, Ferc realises it has to be more of a bully to preach the right model for US power, even if that means treading on state sensibilities. "We were overly deferential to California's rules and market design," says one Ferc official. US companies hope President Bush will give them a freer run at foreign as well as domestic oil. The US has trade and investment bans on eight countries - of which Iraq, Iran and Libya are Opec members, and a fourth, Sudan, a growing oil producer. The upshot, according to Cambridge Energy Research Associates, may be to reduce the production capacity of the three sanctioned Opec producers by 1.5-2m b/d. That, in turn, makes the world market tighter than it would otherwise have been, to the obvious detriment of such a big oil importer as the US. US companies clearly fret more at the unilateral sanctions on Iran and Libya than the multilateral United Nations embargo on Iraq, which also restricts their competitors. It may also be time for the US to recognise not only how outdated the notion of energy independence at home is, but also the wisdom of cloaking its foreign energy policy in a more multilateral guise. The Baker Institute-Council on Foreign Relations report suggests ways this might be done. The US could take a less confrontational line towards Opec on prices, set Russia an example by signing the European energy charter treaty that governs energy trade and transit, and adopt a hemispheric approach to energy relations with Canada and Mexico. Copyright: The Financial Times Limited SURVEY - ENERGY & UTILITY REVIEW: Move to build a stronger base on alternative cleaner power: ECONOMICS OF ENERGY SUPPLY: RENEWABLE POWER by Matthew Jones: Recent figures indicate that, up to 1999, there was more than 13,000MW of installed windpower capacity around the world, the majority of which was in Europe and mainly in Germany, Denmark and Spain Financial Times, Apr 30, 2001 By MATTHEW JONES Earlier this year, Shea Homes, the tenth largest house builder in the US, struck a deal with solar cell manufacturer AstroPower to make solar power a standard feature in 100 new homes in San Diego, California. With a shortage of electricity in California and rolling blackouts sweeping the state, Shea had spotted a market for environmentally friendly homes in which the owners could take control of their own power generation. This relatively modest move, which Shea hopes to extend to a further 100 homes in the next 18 months, is one indication of the way in which new energy technologies are becoming more mainstream. In the US, Europe and, to a lesser extent, Asia, manufacturers of solar cells, wind turbines, fuel cells and microturbines are reporting booming sales. AstroPower has already sold all of the cells it can make for this year. Robin Batchelor, manager of Merrill Lynch Investment Managers' new energy technology fund, says the growth is being driven by environmental pressure to reduce greenhouse gas emissions and concerns about power quality and reliability from centralised generation systems in some parts of the world. "The California power crisis has raised awareness of some of these technologies and, at the same time, has allowed manufacturers to demonstrate that they work. On top of this, many countries around the world are offering fiscal incentives to build green power plants and improvements in the technology are bringing the costs more into line with conventional power generation." Windpower is leading the way so far. The most up-to-date industry figures show more than 13,000MW of installed capacity around the world at the end of 1999. Of this, 70 per cent was installed in Europe - mainly in Germany, Denmark and Spain, 20 per cent in North America and the remaining 10 per cent largely in the Asia-Pacific region. Photovoltaic, or solar, cells are further behind because of relatively higher equipment costs. About 520MW of capacity had been installed at the end of 1999 in countries belonging to the Organisation of Economic Co-operation and Development. A recent report by Dresdner Kleinwort Wasserstein, the German banking group, forecasts that both wind and solar power generating capacity will grow by 25 per cent a year in the next five years to 67,000MW and 4,600MW respectively. Longer term figures produced by Royal Dutch/Shell, the Anglo-Dutch oil group, show solar power overtaking wind in 2040 and becoming the world's overall largest source of electricity by 2050. Fuel cells, which convert hydrogen to electricity, heat and water vapour through an electro-chemical reaction, are still at a relatively embryonic stage but are developing rapidly. Manufacturers, such as Ballard Power Systems of Canada and Fuel Cell Energy (FCE) of the US, have, in recent months, begun to make the transition from pilot projects to first commercial sales. Ballard, which specialises in fuel cells for the transportation market, has signed an agreement to supply cells for 30 public buses in 10 European cities. FCE produces larger fuel cells for the stationary power market. It is expected this summer to win a contract to supply 12 fuel cells to Connecticut under an agreement with Enron, the US energy group. The pace of deployment of fuel cells into the transport market is currently uncertain and will depend on the motor and oil industries agreeing what fuel to use as a source of hydrogen. The ideal solution is to use pure hydrogen gas, but oil companies argue that this requires a lot of storage capacity and would mean building a new fuel infrastructure around the world at vast expense. Other solutions are being developed, including the use of methanol or ordinary petrol, from which hydrogen can be produced onboard the vehicle via a reformer. Industry observers are more confident about the market for stationary fuel cells. According to a study published in March by Allied Business Intelligence, an independent US researcher, global electricity generating capacity from fuel cells will grow from just 75MW in 2001 to 15,000MW by 2010. The countries expected to take the lead are the US, Germany and Japan. Microturbines are seen as an intermediary step towards fuel cells, allowing efficient small-scale generation of electricity from a variety of more traditional fuels, including natural gas, propane, diesel, kerosene and methane-based gases sourced from landfill or wastewater sites. Growth in sales has accelerated in the last year, driven, in large part, by the California energy crisis. Capstone, one of the leading manufacturers, saw its microturbine sales more than triple last year and has a backlog of orders for 2001. Some in the energy industry believe the surge in the use of new energy technologies may now be under threat following the refusal by the US to ratify the Kyoto agreement on reducing greenhouse gas emissions. Recent policy statements by the new Bush administration indicate it is more focused on developing fossil fuels and solving the immediate energy shortages than increasing the use of alternative energy forms. However, the European Union appears to be gathering enough support to push ahead with the agreement without the US. In spite of his stand against Kyoto, president Bush has also agreed to extend fiscal incentives for electricity generated from wind power and biomass for another three years, a move that has been greeted favourably by the markets. Copyright: The Financial Times Limited BRAZIL: UPDATE 1-Petrobras to buy Enron stakes in Brazil gas firms 04/30/2001 Reuters English News Service (C) Reuters Limited 2001. RIO DE JANEIRO, April 30 (Reuters) - Brazilian state oil company Petrobras said on Monday it had signed a deal with U.S. energy giant Enron Corp to acquire Enron's stakes in two Rio de Janeiro natural gas distributors. Petrobras said in a statement the agreement signed on Sunday in Houston called for Petrobras "along with other investors" to buy Enron's 25.38 percent stake in Cia Distribuidora de Gas do Rio de Janeiro (CEG) that distributes gas in the city of Rio, and 33.75 percent in CEG-Rio that services the state. The deal is expected to close within 90 days, Petrobras said. It did not provide the value of the deal, saying only that completion of the deal still depended on "certain conditions" and had to be approved by the authorities. The market had expected Petrobras, jointly with its Petros pension fund, to pay up to $200 million for CEG stakes. Officials with none of the companies involved were available for comment. Market sources have said that Petrobras was likely to split the acquired stakes evenly with Petros, to avoid technical nationalization of both CEG and CEG-Rio, privatized in 1997. The government's BNDES development bank already has a 34.5 percent stake in CEG, while Petrobras' distribution arm BR Distribuidora owns 25 percent of CEG-Rio. Spain's Gas Natural which has 18.89 in CEG and 25.12 percent in CEG-Rio operates both distributors. Despite the sale of the two stakes, Enron, which is the world's largest marketer of electricity and natural gas, still has major gas holdings in Brazil via its subsidiary Gaspart, which controls gas distributors in seven Brazilian states, including rich southern states of Santa Catarina and Parana. Local media has speculated the company is preparing to sell Gaspart, too. Enron's recent global strategy of redirecting resources to its growing energy trading and bandwidth trading businesses, has been leading it away from some of the power generation and power and gas distribution businesses that constitute its Brazilian portfolio worth around $2 billion. The deal between Petrobras and Enron may signal an improvement in relations between the two companies who in the past year have clashed over Enron's access to Petrobras-administrated Bolivia-Brazil natural gas pipeline. ? Petrobras to Buy Enron's Stake in CEG, CEG-Rio Gas Distributors 2001-04-30 10:00 (New York) Petrobras to Buy Enron's Stake in CEG, CEG-Rio Gas Distributors Rio de Janeiro, April 30 (Bloomberg) -- Petroleo Brasileiro SA said it agreed to buy Enron Corp.'s stakes in Rio de Janeiro's largest natural gas distributor, as Brazil's state-controlled oil company seeks outlets to sell more gas where demand may surge. Petrobras said it, and other unnamed investors, reached an agreement over the weekend to buy a 25.4 percent stake in CEG and a 33.8 percent stake in its sister company CEG-Rio. Terms of the transaction weren't given. Government officials earlier said the acquisition was likely to be worth more than $200 million. The oil company plans to boost its stakes in gas distribution as demand surges, led by increased use of gas in Rio's metalworking industry and new thermo-electric generating plants coming on line in the next half-decade. Enron seeks to concentrate on power generation in Brazil. Petrobras estimated it will take 90 days for the transaction to be completed. Petrobras said earlier it wants to boost its stake in 13 different Brazilian gas distributors. It seeks outlets to sell about 30 million cubic meters of gas that it plans to transport daily through its $2 billion Bolivia-Brazil pipeline by 2005. CEG accounts for almost 17 percent of Brazil's natural gas distribution market, analysts said. The distributor is operated by Spain's No. 1 natural gas company, Gas Natural SDG SA, which owns about 19 percent of CEG. --Joshua Schneyer in Rio de Janeiro (5521) 516-1552 or jschneyer@bloomberg.net through Sao Paulo/bh Story illustration: For CEG shares, click on {CEGR3 BS <Equity< GP <GO<} Brazil/Petrobras/CEG -2: Price Tag Seen About $200 Mln 2001-04-30 10:09 (New York) RIO DE JANEIRO (Dow Jones)--Brazil's Petroleo Brasileiro SA (PBR) said Monday it has singed an agreement with Enron Corp. (ENE) to acquire the stake Enron has in local gas distributor Companhia Distribuidora de Gas do Rio de Janeiro (E.CDR), or CEG. Petrobras said it will buy the 25.38% stake Enron owns in CEG as well as the 33.75% stake the U.S. energy company has in local unit CEG-Rio. The company didn't disclose the value of the deal. Market observers have said Enron's interest in CEG carries a price tag of about $200 million. (MORE) DOW JONES NEWS 04-30-01 10:09 AM- - 10 09 AM EDT 04-30-01 Brazil Petrobras Seen Paying $240M For CEG Stake 04/30/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) 1901GMT RIO DE JANEIRO (Dow Jones)--Brazil's Petroleo Brasileiro SA (PBR) will likely pay $240 million for the stake Enron Corp (ENE) owns in local gas distributor Companhia Distribuidora de Gas do Rio de Janeiro (E.CDR), or CEG, a Petrobras official close to the negotiation said Monday. Petrobras, as the federally-owned oil group is locally known, said early Monday it had singed an agreement with Enron to buy the 25.38% stake the U.S. energy group owns in CEG as well as the 33.75% stake Enron has in local unit CEG-Rio. "We still have 90 days to seal this acquisition, but the total amount will probably be $240 million if no more adjustments are made," the official said. Market observers had said Enron's interest in CEG carried a price tag of about $200 million. The acquisition is part of Petrobras' strategy to participate in gas distribution companies serving Brazil's most-industrialized states of Sao Paulo, Rio de Janeiro and Minas Gerais, thus finding buyers for its natural-gas output. CEG serves the metropolitan Rio de Janeiro area, and CEG-Rio supplies industrial towns in the greater Rio de Janeiro region and the interior of the state. Formerly a state-run company, CEG was privatized in 1997. Its shareholders are Spain's Gas Natural SDG SA (E.GSN) and Iberdrola SA (E.IBR), Argentina's Pluspetrol and Brazil's BNDESPar, the investment arm of the national development bank, BNDES. At 03:20 p.m. EDT (190 GMT), Petrobras preferred shares had slipped 0.8% to 53.00 reals ($1=BRR2.2) in thin trade, while CEG's fell 3.1% to BRR9.50 after only two trades. -By Adriana Brasileiro, Dow Jones Newswires; 5521-580-9394, adriana.brasileiro@dowjones.com ? ? Brazil's Petrobras Agrees to Buy Enron's Stake in Natural Gas Distributor CEG 04/30/2001 Dow Jones Business News (Copyright © 2001, Dow Jones & Company, Inc.) RIO DE JANEIRO --- State-owned oil concern Petroleo Brasileiro SA has agreed to acquire Enron Corp.'s stakes in Rio de Janeiro's largest natural gas distributor, Companhia Distribuidora de Gas do Rio de Janeiro, or CEG. Petrobras (PBR) said Monday that it will buy the 25.38% stake Enron (ENE) owns in CEG and the U.S. company's 33.75% stake in CEG's sister firm, CEG-Rio. Petrobas, Brazil's largest company, didn't disclose the value of the deal. Market observers have said Enron's interest in CEG carries a price tag of about $200 million. CEG, formerly a state-run company, was privatized in 1997. Its shareholders are Spain's Gas Natural SDG SA and Iberdrola SA, Argentina's Pluspetrol and Brazil's BNDESPar, the investment arm of the national development bank, BNDES. Petrobras officials had already shown interest in a stake in CEG, which serves the metropolitan Rio de Janeiro area, and CEG-Rio, which supplies industrial towns in the greater Rio de Janeiro region and the interior of the state. Delcidio do Amaral Gomez, energy and gas director at Petrobas, said earlier this year that the interest in CEG was part of the group's strategy to participate in gas distribution companies serving Brazil's most-industrialized states of Sao Paulo, Rio de Janeiro and Minas Gerais. Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. ? Brazil Petrobras To Buy Enron's Stake In Gas Co CEG 04/30/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) RIO DE JANEIRO -(Dow Jones)- Brazil's Petroleo Brasileiro SA (PBR) said Monday it has singed an agreement with Enron Corp. (ENE) to acquire the stake Enron has in local gas distributor Companhia Distribuidora de Gas do Rio de Janeiro (E.CDR), or CEG. Petrobras said it will buy the 25.38% stake Enron owns in CEG as well as the 33.75% stake the U.S. energy company has in local unit CEG-Rio. The company didn't disclose the value of the deal. Market observers have said Enron's interest in CEG carries a price tag of about $200 million. The deal will likely be sealed in 90 days, Petrobras said. Petrobras officials had already voiced interest in a stake in CEG, which serves the metropolitan Rio de Janeiro area, and CEG-Rio, which supplies industrial towns in the greater Rio de Janeiro region and the interior of the state. Delcidio do Amaral Gomez, Petrobras' energy and gas director, said earlier this year the interest in CEG is part of the group's strategy to participate in gas distribution companies serving Brazil's most-industrialized states of Sao Paulo, Rio de Janeiro and Minas Gerais, thus finding buyers for its natural-gas output. CEG, formerly a state-run company, was privatized in 1997. Its shareholders are Spain's Gas Natural SDG SA (E.GSN) and Iberdrola SA (E.IBR), Argentina's Pluspetrol and Brazil's BNDESPar, the investment arm of the national development bank, BNDES. At 10:30 a.m. EDT (1430 GMT), Petrobras preferred shares had climbed 0.39% to 53.62 reals ($1=BRR2.2), while CEG's shares were unchanged at BRR9.80 - both in very thin trade. -By Adriana Brasileiro, Dow Jones Newswires; (5521) 580-9394, adriana.brasileiro@dowjones.com Foreign bids for Saudi gas projects passed on to Fahd's petroleum council 04/30/2001 Agence France-Presse (Copyright 2001) RIYADH, April 30 (AFP) - Bids by 12 foreign oil majors for three Saudi gas projects worth tens of billions of dollars have been referred to the Supreme Petroleum Council (SPC) headed by King Fahd, a newspaper reported Monday. A committee that has been negotiating the offers with the companies passed on the bids along with detailed recommendations for the council to make a final decision, Al-Iqtissadiya business daily said. The committee, comprising ministers who are also SPC members, is headed by Foreign Minister Prince Saud al-Faisal. The three gas projects are located in the South Ghawar field near Al-Hufuf in the kingdom's Eastern Province, Shaybah in the Empty Quarter of southeast Saudi Arabia, and the northern Red Sea. They cover an area of 440,000 square kilometers (176,000 square miles), making it the world's largest area for hydrocarbon investment. Oil Minister Ali al-Nuaimi said in mid-April that the study of the bids was still in its preliminary stages, but foreign oil executives expected a decision with a few weeks. US majors Enron and Occidental in a joint bid, as well as Chevron, Conoco, ExxonMobil, Marathon, Phillips and Texaco have been shortlisted for the Saudi projects. Rounding out the list are European firms BP Amoco, Eni, Royal Dutch Shell and TotalFinaElf. ExxonMobil, Shell and TotalFinaElf are in the bidding for all three ventures. The projects involve gas exploration and production, setting up petrochemical industries and power and water desalination plants. Al-Iqtissadiya said a number of bids had been excluded by the negotiating committee, but at least half of the companies would be picked. The projects are to be carried out simultaneously by consortia of two to three firms in cooperation with Aramco, the Saudi national oil company, the newspaper said. Aramco has been working to double the Saudi gas network's capacity from the current 3.5 billion cubic feet (105 million cubic metres) per day to seven billion cubic feet (210 million metres) daily in 2004. This will boost supplies for industrial use to Riyadh, eastern and western regions. Saudi Arabia, which sits on top of the world's biggest oil reserves, has proven natural gas reserves of 220 trillion cubic feet (6.6 trillion cubic metres). UK: FACTBOX-LME membership changes over last 15 years 04/30/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON, April 30 (Reuters) - French bank BNP Paribas said on Monday it had become a member of the London Metal Exchange (LME), the world's largest non-ferrous metals market. Paribas said that its subsidiary BNP Paribas Commodity Futures Ltd had had been accepted as an LME Associate Broker Clearing Member (ABCM). It bought 250,000 shares in LME Holdings, the company created when the LME demutualised in 2000. BNP's membership takes the number of ABCMs up to 25. These firms are the second tier of LME membership - ABCMs have all the rights and privileges of LME membership, but cannot trade during the open-outcry trading sessions. There are 12 ring-dealing members (RDMs), who alone are entitled to trade on the open-outcry floor. The following chronology details the notable changes on the LME since the high water-mark of the mid-1980s, when there were around 30 firms trading on the exchange floor. APRIL 2001 - ING Baring Futures & Options (UK) Ltd relinquishes its ABCM membership. JANUARY 2001 - Brandeis (Brokers) Limited relinquishishes ABCM status, selling its 2.5 percent equity stake to fellow RDM Metdist. OCTOBER 2000 - Natexis Banques Populaires buys 80 percent of Sogemin Metals Ltd from Belgian metals producer Union Miniere. JULY 2000 - Ring dealer Enron Metals Ltd (formerly known as MG Plc) buys fellow ring dealer Rudolf Wolff Group, a wholly-owned subsidiary of Canadian metals producer Noranda Inc , for six million pounds. Wolff was one of the founding members of the 123-year old LME. JUNE 2000 - Ring dealer Sogemin Metals Ltd announces it is in talks over a link-up with France's Natexis Banques Populaires. MAY 2000 - MG agrees to a 300 pence per share cash offer from U.S. energy and communications group Enron. EnronOnline trades around 840 products in some 13 countries in 11 currencies. APRIL 2000 - Brandeis (Brokers) Ltd leaves the floor to become an associate member. JANUARY 2000 - Standard Bank London, part of Standard Bank of South Africa buys most of the trading accounts and customer positions of ring-trader Brandeis from Pechiney . OCTOBER 1998 - Metallgesellschaft purchases ring dealer Billiton Metals Ltd, trading arm of producer Billiton . Billiton ceases to be a ring trader. APRIL 1998 - ED & F Man purchases the brokerage accounts and assets of Gerald Metals, and assumes its ring-dealing status. SEPTEMBER 1997 - Bank of Nova Scotia purchases ring dealer Mocatta. Company changes name to ScotiaMocatta. JUNE 1997 - Deutsche Morgan Grenfell, part of Deutsche Bank AG , withdraws from the floor. It is hit by worsening trade conditions in the wake of the copper crisis. NOVEMBER 1996 - Lehman Brothers Commodities, the trading arm of Lehman Bros Holdings Inc , withdraws from the floor. Trading conditions hurt after the July copper crisis, when Japanese brokerage Sumitomo Corp announces losses of $2.6 billion run up in 10 years of unauthorised trading by head trader Yasuo Hamanaka. SEPTEMBER 1996 - Fimat Metals, a subsidiary of Fimat International Banque, buys ring dealer Brody White. NOVEMBER 1994 - Ring trader Metdist buys fellow ring trader Metchim, which withdraws from the floor. MAY 1994 - Sucden UK, a subsidiary of French commodity trader Sucres et Denrees, wins ring dealer status. NOVEMBER 1992 - Credit Lyonnais Rouse, a subsidiary of French bank Credit Lyonnais , is elected as a ring-dealer. OCTOBER 1992 - Metallgesellschaft buys ring dealer Charles Davis from Glynwed International. Charles Davis leaves the ring. JANUARY 1991 - Metchim Ltd, part of European copper refiner Hofibel, is elected as a ring dealer. OCTOBER 1990 - Barclays Bank buys LME ring dealer Deak International from New Zealand-based Jarden Morgan. It will trade on ring as Barclays Metals. Deak itself had bought the ring operation from Johnson Matthey Bankers in the mid-1980s. SEPTEMBER 1990 - Entores, part of the Minemet Group, withdraws from the ring. Cost pressures cited. FEBRUARY 1990 - Drexel Burnham Lambert ceases to be a ring trader when parent company goes bankrupt after junk bond crisis. LATE 1980s - Metallgesellschaft purchases ring dealer and warehouser Henry Bath and Co. OCTOBER 1985 onwards - During this period Lazmet, Anglo Chemical, Philip and Lion, Cominco, J.H. Raynor, Lonconex and Continental Ore relinquish ring dealer status in wake of 1985 tin crisis, when International Tin Council defaulted on LME to the tune of some 800 million pounds. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. GOLDEN TRIANGLE RESOURCES NL: Progress Report - Other (Part B : Section 02 Of 02) 04/30/2001 Australian Stock Exchange Company Announcements Copyright of Australian Stock Exchange Ltd Report code 11002: Progress Report - Other Report code 05003: Third Quarter Cashflow Report Report code 03011: ASC Annual Audited A/Cs Report code 03012: ASC Annual Audit Review Report code 03013: ASC Annual Directors' Statement Report code 10002: Dividend Pay Date Report code 10003: Dividend Rate Issuer Code GTL: GOLDEN TRIANGLE RESOURCES NL Industry code 012: Gold Explorer Lodged 30 April 2001 Entered 30 April 2001 12:20:17 Melbourne [Ref: 176065] Follow-up announcement Media release: Billion dollar magnesium industry dawns GOLDEN TRIANGLE RESOURCES NL 2001-04-30 ASX-SIGNAL-G HOMEX - Melbourne +++++++++++++++++++++++++ MEDIA RELEASE CONTINUED 3. WOODSREEF REFINERY PROJECT AND ASSOCIATED THIRD PARTY POWER STATION The Board is well aware that a major factor limiting the growth of the magnesium market has been attitudes of users, competing products such as plastics and other metals and the lack of a large sustainable quality supply. Environmental imperatives and the need to reduce fuel usage globally is deemed to be the strongest imperative as evidenced by Ford's extension of the contract for take out with AMC. If we are to aspire to become a major supplier of value added products, then we must have our own independent source of supply and be able to guarantee its quality and continuity. Underpinning our offer of strategic reliability, cost and quality regimes, is the Company's parallel strategy to offer additional long-term security of supply for companies that choose to work with us. GTL's wholly owned subsidiary, Pacific Magnesium Pty Ltd, plans to build a magnesium refinery in northern New South Wales, Australia and is now engaged in initial elements of the definitive and bankable stages of feasibility. The cost of this activity is estimated at $25M. It has been the practice of the Board to seek to raise funds as needed to meet set goals. We have sufficient funds available, to continue with our R&D program and refinery evaluation work (having just completed a site evaluation study) and we are in the process of creating a feedstock protocol. It is apparent to us that the development of the alloying technology has more immediate prospects for revenue generation and alliance participation when compared to the longer lead time, and costs, for the apparatus pilot and the refinery bankable feasibility, design and construction. A key driver in our strategic positioning is our environmental advantage and we are informing governments, industry and commerce across of the globe of this, now. Using serpentinite as the feedstock, this production facility would be designed to capture the "green environmental label" since, unlike magnesite, there is "no carbon dioxide" in our feedstock. Additionally the Company will undertake no mining to gain access to it's feedstock unlike the magnesite mines in Queensland, Northern Territory, South Australia and Tasmania. GTL also proposes to remove and neutralise environmentally harmful tailings that are currently the responsibility of the NSW government. This will potentially save the taxpayers millions of dollars. This refinery, once completed, has the potential to provide, from its planned completion date in 2006 and beyond, security of supply of high quality metal and alloys. If the apparatus is ready we propose to use it. AN OFFER TO GOVERNMENT TO CO-JOINTLY DEVELOP THE VALUE ADDING TECHNOLOGIES IN AUSTRALIA GTL has made an offer to the Federal, Victorian and NSW governments seeking their interest in establishing an R&D laboratory here in Australia to focus on the alloying and the electrolyser research and development and commercialisation. The necessary prototypes could be built here in association with industry, government and academia from a major university working with our research venture at Bell Gurion University in Israel. The proposed activities could include design, construction and testing of: * multifunctional technological plants for the production of magnesium and its alloys; * electrical furnaces for the production of magnesium alloys, with components of highly different densities including alloys with special characteristics; * facilities for the continuous casting of thin sheets or bands of magnesium alloys. A THIRD PARTY POWER STATION We have all seen the debate on the critical state of energy supply here in Australia and recently in the USA. The price and availability of reliable energy is critical to our proposal. There is no power station near Woodsreef. There is a low-level availability to Barraba. We have held extensive discussions with suppliers, governments (State and Federal) and with industry experts. The refinery requires an electricity supply of between 140MW and 200MW base load and the Board has determined that experienced energy corporations will be invited to propose a "build, own and operate" scenario with GTR as the base contract. Any surplus would be offered in the growing Australian national electricity market. Local businesses and local government shires in the region have been canvassed with a view to creating a supply regime. GTR has received a written offer from Enron Australia, one of the world's largest energy traders and producers, to act as the trader of both electricity and a magnesium metal hedge. We have had positive discussions on this and will move towards a more defined outcome as a part of our planned bankable feasibility study. TARGETED REVENUE STREAMS At this early stage of assessment and given the immaturity of the current global market, unknown growth cycle and competitive response from plastics and other substitutes, it is very difficult to assess the revenue streams and associated costs. We are, therefore, refraining from making definitive claims. Our assembled investigation and discussions with industry participants indicates a potential revenue stream in the hundreds of millions of dollars per annum. In support of this we have focused on the history of the aluminium industry as a major pointer of the possible future values. Magnesium metal and its alloying properties indicate a high potential for application in the industry sectors described in the opening paragraphs of this document. This coupled with the impetus of environmental regulatory frameworks across the globe demanding reductions in weight and greenhouse emissions, underlies our confidence in GTL's vision outlined above. Published material including that of the Light Metals Action Agenda (background paper on aluminium, magnesium and titanium issues) published by the Department of Industry, Science and Resources of the Australian Government, values the revenue generation for the Australian aluminium industry at over AUD $9 billion annually. Among other things this publication says: "the (magnesium) industry is at a stage of development where key players are represented by a number of magnesium metal projects ... as with aluminium end users are likely to become key players as increased demand for light metals drives growth." (Nov, 2000:3). Further the publication says, "according to one analyst rising demand for light weight automotive components could see world magnesium production increase from its current level of 450 thousand tonnes to 1 million tonnes by 2010." (Nov, 2000:6). Statements to the Australian Stock Exchange, by an existing Australian magnesium proponent: For further information please call Kevin Beck Emmanuel Althaus CHIEF NEGOTIATOR & STRATEGIST 03 9510 2544 0412 451 029 eZoka adds up for SMEs 04/30/2001 M2 Presswire Copyright 2001 M2 Communications, Ltd. All Rights Reserved. UK SMEs can now take advantage of online access to financial services following partnership deals secured by leading eprocurement web site eZoka. Norwich Union HealthCare, Woolwich Independent Financial Services Ltd, Sedgewick Independent Financial Consultants and Millfield are all now offering online financial advice services as part of the eZoka offering to small businesses. Sonia Lo, CEO of eZoka said: "We are firmly on the side of the SME and understand that financial services can often take time to sort out. This new online access to leading financial services organisations will provide our members with fast sound financial advice to enable them to choose the most suitable plans based on their individual needs, priorities and cost." Early on, eZoka was aware of the growing need for accessible financial services through a study conducted with NOP. More than a third of the small businesses cited that they needed advice on financial matters. eZoka members can now arrange group pensions, company insurance, life assurance, access an IFA and online financial planning services and access leading credit evaluation services. eZoka members will be offered the option of paying for the financial services on a fee or commission basis to suit their own budgeting. There is an additional incentive for members taking out either a healthcare scheme (through Norwich Union) or a pension plan (through Millfield, Sedgewick or Woolwich Independent Financial Services Ltd). eZoka will rebate up to five per cent of the annual premiums back to the company or policyholder on the anniversary of the policy. Lo continued: "We already bring our members excellent negotiated rates on business supplies - by including direct access to financial services we are providing them with tailored advice on their daily business requirements." Through the eZoka site, businesses have access to a huge range of products and services including: Courier services provided by Parcelforce, IT equipment from the UK's largest supplier Action, telecommunications from Primus Telecom, gas from Amerada and electricity from Enron. All the above services are available at significantly discounted rates - for example, a small business could save 60% off their telecommunications costs. eZoka is a technology company that operates through a network of established commercial and professional organisations to provide big company prices, quality and service to smaller businesses. eZoka provides these companies with substantial savings on all their goods and services by pooling individual business' purchasing requirements and then negotiating price agreements with major suppliers. Members are guaranteed a level of discount and immediate shipment. eZoka does not charge its members a fee to register with the site. ((M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data prepared by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com)). Atlantic Quay Watch 2001-04-30 10:52 (New York) M E R R I L L L Y N C H Research Comment Utilities - Water Reference Number 30212010 Europe Apr/30/2001 10:51 Robert Miller-Bakewell (44 20) 7772-2453 Reason for Report: What's Happening This Week In Utilities Issue To Watch: Puhca Repeal o Tuesday's decision by the US Senate's Banking Committee to repeal. o PUHCA is the first stage in a lengthy process, which could take well into the autumn or longer to complete. o The political commitment to change is much stronger than previously - the Committee voted 19-1, underlining the bi-partisan support. The risks lie in the repeal legislation getting bogged down, especially with measures designed to resolve the California supply crisis. o The Public Utilities Holding Companies Act dates back to 1935, and has been the utility industry's equivalent of Glass-Stegall in imposing rigorous restrictions on corporate activity involving US utilities. o PUHCA's narrow definition of a utility has acted as a deterrent. Even water utility assets are classified as non-utility in its criteria of fit and proper ownership of US electric and gas utilities. Thus Scottish Power's entry into the USA was via the non-PUHCA registered PacifiCorp. Now it's being linked with Enron's Portland General. o Indeed, E.on has clearly stated that PUHCA has increasingly shaped its attitude towards investing in European water assets. In particular, it's waiting with interest to see how Scottish Power's petition fares. Table 1: Last Weeks Winners and Losers Last Week Since Jan 1st Last Week Since Jan 1st Inter Power +5.5% +28.5% Viridian -4.0% +0.7% British Energy +4.9% +23.5% Iberdrola -3.3% +30.7% Gas Natural +2.5% +4.5% Evn -3.3% +9.5% Kelda +1.9% -3.8% EDP -3.2% -9.0% Lattice +1.6% -4.0% Red Electrica -3.0% +6.9% Rwe +1.5% -1.9% Aem -2.5% -6.1% Vivendi Env. +0.8% +10.7% SSE -2.5% +2.1% National Grid +0.6% -6.7% Electrabel -2.5% +7.9% Edison +0.5% -4.7% Verbund -2.4% +21.9% Italgas +0.5% +4.8% Severn Trent -2.3% -2.8% Source: Merrill Lynch Estimates The Week Past: Scottish Power - PacifiCorp Incentives PacifiCorp has asked regulators for permission to reward residential customers who reduce their use of electricity by 20% over last summer's levels. Customers supplied by Pacific Power and Utah Power in Utah, Oregon, Washington, Wyoming and Idaho would receive a 20% credit on their next four quarterly bills for each month they reduce electricity use by 20% or more. PacifiCorp is seeking to minimise the extent to which it has to satisfy peak requirements by purchasing in the wholesale market. Suez - Raising Cash At Vinci On Tuesday, Suez sold 16% of Vinci at an average price of e63 per share. A total of 9.5m shares were sold through a private placement and 3m more shares via an exchangeable bond. Thus Suez raised ce780m. It now holds just 1% of Vinci and thus abandons its position as core shareholder. This move was expected (Suez had already stated that it did not regard the stake as strategic), although it has come sooner than we anticipated. Verbund - Better Trading But Strategy Deficit With a 5% increase to e77.6m Verbund reported Q1 EBIT above ML expectations (e76m); cost savings were the key - particularly in personnel (-13%) and other operating expense (-28%). However, the sharp improvement in the finance costs (e21m vs e52m) appears to be in large part due to an accounting restatement of foreign currency-denominated liabilities. Whilst it's no longer possible to follow the underlying end customer pricing developments based on the data Verbund provides, it's clear that, so far, the ever-increasing proportion of trading is having little beneficial impact on EBIT. Electricity sales revenues rose e62m, whereas electricity market purchases rose e88m year-on-year. The Week In Prospect: Dwr Cymru - The Final Hurdle Financing of the Glas Cymru bid closes on Wednesday 2(**nd). All the indications are that the multi-tranche exercise has gone well, notwithstanding the recent move upwards in bond yields. Once the full terms are known we believe it will be clear that East Surrey's early March L100m index linked long dated bond was very opportunely timed - its terms are likely unrepeatable. Completion of both the outsourcing in late March (principally to United Utilities) and now the financing should enable quick closure of the L1.8bn purchase of Dwr Cymru from WPD. London Underground - A Green Light? Having been pulled this way and that by the politicians, the consortia bidding to maintain the London Underground are hopeful that this week's promised decision will materialise. awg is a member of LINC and RWE has inherited Thames Water's position in Metronet. Final bids were submitted before Christmas. Each contract will be worth cL100m pa. The political wrangling led to the DETR conceding in February more fundamental changes, including London Underground's greater involvement. Now with the formal General Election campaign expected within 10 days, the DETR is very keen to deliver its London Underground promises. However, with the Mayor's legal challenge still to be resolved, the target 1(**st) July start date looks increasingly improbable. Powergen - Discount Appropriate First quarter figures, due on Thursday 3(**rd), have been made less important by the agreed bid from E.on. There are no comparable figures for 2000, but we anticipate recently acquired LG&E to contribute L85m out of forecast pre- goodwill pre-tax profits of L123m. A first quarterly dividend of 9.05p (25% of the 2000 total) is looked for; this would be covered by 17.5p of earnings (again pre-goodwill). Given that the E.on deal could take a year or more to complete (even if PUHCA is repealed) we think the current 7%/50p discount to the 763p NPV of the bid and Powergen's 2000 dividends is appropriate. Scottish Power - Annus Horribilis On Thursday 3(**rd), we expect pretax profits before goodwill and exceptionals to be 16% lower at L620m. On the same basis, EPS are expected to have fallen by 32% to 28.1p - although this will have been exaggerated by early adoption of FRS19 on deferred accounting. An unchanged quarterly dividend of 6.51p would give full year DPS of 26.04p. Rising electricity prices in the Western US states, exacerbated by a failure at a power plant in Utah made a sizeable dent in Scottish Power's profits. The problems at 51% owned telecom subsidiary Thus (both profitability and share price performance) have not helped, and the abandonment of the JV with Royal Bank of Scotland has hit sentiment. Thursday's announcement will also focus attention on Scottish Power's future corporate profile. What conclusions have been reached in the strategic review of Southern Water? Is its sale - quite possibly to Enel for close to L2bn - a precursor to a $3bn move for Oregon-based Portland General? Last week long term sale negotiations between Enron, owner of this PacifiCorp neighbour, and Sierra Pacific broke down, but we believe Portland General's short power position would increase rather than decrease the company's risk profile. With these uncertainties, and the Californian situation set to remain a drag on profits for some time, the shares are likely to be held back. Vivendi Environnement - 1Q Data Even though 63% shareholder Vivendi Universal has already released 1Q data, Vivendi Environnement's 1Q isn't due until the end of the week or even Monday next. For the three months to end March we look for sales of e6.45bn and EBITDA of e0.85bn. There will have been further benefit on consolidation from e weakness; 1Q e/$ was 8% more favourable than a year earlier. So far, the US operations do not appear to be affected overall by the economic slowdown: the water business has benefited from a surge in demand from the oil & power industries, which has offset slack demand from steel and forest products. Table 2: Companies Mentioned in this Report NAME SYMBOL Ccy Price awg ALWBF GBP 544.00 B-2-3-7 E.on AG E.ONAF EUR 56.25 B-3-3-7 East Surrey Holdings ESRYF GBP 193.50 B-2-2-7 Enel SpA EN USD 33.70 A-1-1-7 Enron Corp ENE USD 63.50 B-1-1-7 Gas Natural GASNF EUR 19.17 B-3-2-7 Powergen PWG USD 41.25 B-3-3-7 Royal Bk Scotland RBSPF GBP 1653.00 B-1-1-7 Sierra Pacific Resources SRP USD 15.98 C-3-1-9 Suez-Lyonnaise des Eaux SLEDF EUR 166.70 B-2-1-7 Thus THUS GBP 47.50 N/a United Utilities UU USD 17.65 B-3-3-7 Verbund VBUOF EUR 124.55 C-4-3-7 Vinci-GTM VNCJF EUR 66.75 B-1-1-7 Vivendi Environnement VIVEF EUR 48.69 B-3-2-7 Vivendi Universal VVDUF EUR 77.30 Rstr* Source: Merrill Lynch Estimates *Solicitation of commission orders is prohibited (GASNF, VIVEF) MLPF&S or one of its affiliates was a manager of the most recent offering of securities of this company within the last three years. (ESRYF, RBSPF) The company is a corporate broking client of Merrill Lynch International in the United Kingdom. (EN, RBSPF, SRP) MLPF&S was a manager of the most recent public offering of securities of this company within the last three years. (ALWBF, EONAF, ESRYF, GASNF, RBSPF, SLEDF, VBUOF, VNCJF, VIVEF, VVDUF) The securities of the company are not listed but trade over-the-counter in the United States. In the US, retail sales and/or distribution of this report may be made only in states where these securities are exempt from registration or have been qualified for sale. MLPF&S or its affiliates usually make a market in the securities of this company. Copyright 2001 Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). All rights reserved. Any unauthorized use or disclosure is prohibited. This report has been prepared and issued by MLPF&S and/or one of its affiliates and has been approved for publication in the United Kingdom by Merrill Lynch, Pierce, Fenner & Smith Limited, which is regulated by SFA; has been considered and distributed in Australia by Merrill Lynch Equities (Australia) Limited (ACN 006 276 795), a licensed securities dealer under the Australian Corporations Law; is distributed in Hong Kong by Merrill Lynch (Asia Pacific) Ltd, which is regulated by the Hong Kong SFC; and is distributed in Singapore by Merrill Lynch International Bank Ltd (Merchant Bank) and Merrill Lynch (Singapore) Pte Ltd, which are regulated by the Monetary Authority of Singapore. The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. Additional information available. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities ("related investments"). MLPF&S and its affiliates may trade for their own accounts as odd-lot dealer, market maker, block positioner, specialist and/or arbitrageur in any securities of this issuer(s) or in related investments, and may be on the opposite side of public orders. MLPF&S, its affiliates, directors, officers, employees and employee benefit programs may have a long or short position in any securities of this issuer(s) or in related investments. MLPF&S or its affiliates may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this report. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Provider ID: 30212010 -0- Apr/30/2001 14:52 GMT
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