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Decline of ENRON

ENRON
Enron Corporation was found by mergers of two companies Houston natural gas and Inter North
1985. ERON Corporation was as of the largest integrated natural gas and electricity companies of the
world. It have been dealing with liquid gas, electricity production, supplies of solar and wind energy
all over the world. It has also dealing with the oil and gas exploring all over the world. It was the
largest oil and gas company in North America.

The origin of Enron was started early from 1930 when Northern natural gas company found in
Omaha Nebraska. The Nebraska is the US state and Omaha is the largest city of the state.

The Northern natural gas company and three other companies North America Light Power Company.

United light railways company having 35 percent share and lone star gas corporation with the 30
percent share formed the enterprise.

It was the time when stock market just crashed in 1929 and after few months this new company was
established. The company got very cheap labour due to unemployment and used 24-inch steel pipe
and it was able to transport six times the amount of gas which was previously carried by 12-inch
pipe.

Northern Gas Company increased its capacity to double within two years and it became the first
natural gas supplier to state of Minnesota.

Acquisition of Northern Gas Company


It acquired a lot of companies in 1967 like Protane Corporation, the Caribbean, Mineral industries,
National Poly products Inc, and Viking plastics of Minnesota.

Northern Gas Company expended its business in 1970 and acquired plateau Natural gas Company; in
1971 it acquired Olins companies’ antifreeze production and marketing business.

In the 1973, the Northern Gas Company setup UPG Inc for transportation and marketing of fuels
which was produced by it.

UPG also handhold the oil and liquid gas products for other companies.

National College of Business Administration & Economics (NCBA&E)


Public offering in 1940
In 1940, the federal power commission was created the Natural Gas Act
1938 to regulate the natural gas industry rates and expenses.

In 1941, the United Light and Railways sold its shares of Northern Gas Company to the public, and in
1942 Lone Star Gas distributed its holdings to its stakeholders. The North America Light and power
hold its stake until 1947 and when its shares sold to underwrites (Definition) who those offered the
stock to the public to New York stock exchange in 1947.

IN 1944, Northern America the gas gathering and transmission lines of Argus Natural Gas Company.
In the same year the Argus Properties were consolidated into Peoples Natural Gas Company, a
subsidiary of Northern Gas Company.

In 1952, Peoples Company was dissolved as subsidiary. In 1952, Northern setup another subsidiary,
Northern Natural Gas producing company for the operations of gas leases and wells.

Another subsidiary, Northern Plains Natural Gas Company was established in 1954 to it would bring
the Canadian gas reserves to the Continental United States. From 1954 to 1964 the Northern Gas
Company acquired a lot of other companies to expand its business and growth. The first downfall
was started when Northern Natural Gas producing company was sold to Mobil Corporation in 1964,
but the percent company continued expanding another fronts.

In 1966 another Company was found by Northern with the name of Hydrocarbon transportation Inc.

In 1976, Northern Gas Company formed Northern Arctic Gas Company for Alaskan Arctic Gas
Pipeline and Northern Liquid fuels international Ltd, a supply and marketing, Northern Border
Pipeline Company was also formed with the partnership of four energy companies with Northern
plains Natural Gas as managing partner and started construction of eastern side of Alaskan Pipeline
in 1980. It was completed in 1982.

It was observed that the transporting Alaskan gas to the lower 48 states was very expensive.

Northern Gas Company changed its name to Inter North Inc. in 1980.

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An Instable Organisation Falls

 In 1980, through trying to raise through acquisition, InterNorth became intricate in a coup
clash with Cooper industries Inc. The takeover clash carried a burst of lawsuits between
InterNorth and Cooper. In the 1990s, Enron seemed to be gaining benefits of the InterNorth,
Houston Natural gas merger.
 The company revenue was 16.3 billion dollar in 1985. It is fell to near about 10 million dollar
in every of the next four year however increased to 13.0 billion dollar in 1990. Less Natural
Gas rates was a main reason for disaster.
 Enron was made a deal to established a power plant in India of 2.8 billion dollar, local
politicians were not happy at this. Company beard 550 million lose dollar in India and other
projects
 Nevertheless, stakeholders were not aware of the losses of Enron, because losses
intentionally kept hidden from the all stakeholders.
 President of Enron resigned in August 2001. The go-slow in machinery and E-shares also a
cause of low share price of the Enron.
 At least the Company declared original losses in 1997. After that the company was trying to
sell another Houston energy company that contract shrunken badly. In 2001 Enron marched
for bankruptcy.

Important Events:
 1930: Company of Omaha, Nebraska has been established as Northern Natural Gas
Company.
 1947: The company is listed on the New York Stock Exchange.
 1980: Company name has been changed InterNorth, Inc.
 1985: Houston is a merger takes place with natural gas corporation.
 1986: Company name changed to Enron, the new company is located in Houston.
 1991: Enron begins expansion overseas.
 1999: EnronOnline start.
 2001: After the losses hidden files bankruptcy in light of the pin.

National College of Business Administration & Economics (NCBA&E)