With Cairn India Ltd yet to receive a formal communication on the pre-conditional approval given by the government to its parent Cairn Energy Plc for selling a majority stake in Cairn India to Anil Agarwal-led Vedanta Resources, the board of Cairn India that is meeting on Tuesday in Edinburgh (UK) may not take up this important issue and the meeting is likely to end up taking stock of the company’s performance for the quarter ending June 30, 2011.
The Tuesday board meet was considered crucial as this is for the first time that the board of Cairn India will meet after the government’s conditional approval to the Cairn Energy-Vedanta Resources deal.
However, Bill Gammell, chairman, Cairn Energy, as well as Cairn India may rake up the issue with the Cairn India directors, company sources said, adding that there is no change in the stand of Cairn India even after the government’s pre-conditional approval to the deal.
Cairn India has so far openly opposing the decision over sharing the payment of royalty and cess on the oil produced from the Rajasthan oil fields along with state-owned ONGC, which the government has now set as an important precondition for approving the Cairn Energy-Vedanta deal.
While an official stand of the issue is awaited from Cairn India after the government’s pr-conditional approval to the deal, Cairn India officials still maintain that ONGC with a 30% stake in the prolific Rajasthan oil fields is contractually liable to pay royalty and cess on the entire production.