The Government yesterday fired a warning shot over the bows of ENI, the state-owned Italian oil giant which is stalking Enterprise Oil, Britain's only remaining independent exploration company of any size.
In what appeared to be a clear signal to ENI not to proceed with a bid, the Energy Minister Brian Wilson said it would be "counter-productive" if Enterprise was taken over by a larger oil company.
Enterprise disclosed two weeks ago it had received a bid approach, which it subsequently emerged had come from the acquisitive Italian company. ENI has already tucked British Borneo and Lasmo under its belt.
But it looks certain to face political opposition if it goes ahead with a bid for Enterprise. Mr Wilson said: "Enterprise Oil is one of the success stories in North Sea development over the past few years and there is no guarantee that the projects it finds attractive would interest a state-owned oil giant with a worldwide range of projects to chose from.
"We are seeing great results from the policy of encouraging independents in the North Sea. They are bringing technical creativity and lower demands for returns than oil majors. However, it is counter-productive to that policy if every time an independent makes a breakthrough it is swallowed up by a larger and less flexible company."
ENI is thought to be ready to pay around 700p a share for Enterprise, valuing the company at £3.4bn. It paid £2.7bn for Lasmo two years ago. Enterprise directors, led by its new chief executive Sam Laidlaw who only joined a short while ago from the US oil company Amerada Hess, stand to make £6m from share options if ENI does bid.
The Government has undertaken to keep out of takeover and merger decisions in future, leaving them to the Office of Fair Trading and the Competition Commission. However, it reserves the right to intervene on grounds of "national interest".Reuse content