Cairn seeks nod for Vedanta deal
Ending weeks of uncertainty, Cairn Energy has sought the government's nod for sale of majority stake in its Indian arm to Anil Agarwal-controlled Vedanta Resources, while separately telling partner ONGC that it had no pre-emption right as the deal was a mere share sale.business Updated: Sep 13, 2010 21:54 IST
Ending weeks of uncertainty, Cairn Energy has sought the government's nod for sale of majority stake in its Indian arm to Anil Agarwal-controlled Vedanta Resources, while separately telling partner ONGC that it had no pre-emption right as the deal was a mere share sale.
Undertaking to meet all contractual requirements needed to see the $8.48 billion deal through, the Edinburgh-based Cairn Energy, on September 9, wrote separate letters to the oil ministry for specific approvals.
The approvals sought were in respect of seven exploration blocks Cairn India had won in the New Exploration Licensing Policy (NELP) rounds and concurrence in case of three producing properties, including the giant Rajasthan oilfields that were awarded to it prior to NELP.
Cairn said Vedanta Group was of good standing and had ‘‘the capacity and ability to meet its obligations under the PSCs and is willing to provide an unconditional undertaking."
While only the NELP blocks had provisions for prior government nod in case of transfer of ownership, pre-NELP blocks RJ-ON-90/1, Ravva oil and gas fields in the eastern offshore and Cambay basin CB/OS-2 gas fields off Gujarat coast ‘‘do not require prior consent" of the government.
"Even if there were to be a contractual requirement for seeking prior permission of the government for the transaction, we submit that the present transaction is one that would merit such consent," Cairn said in letters seeking concurrence of the government on the three pre-NELP blocks.
Separately on September 10, it replied to Oil and Natural Gas Corp's queries on the Vedanta deal, saying 40 to 51 per cent shares in Cairn India are changing hands at the corporate level and that will not trigger a pre-emption right of the state-owned firm which is a partner in each of the three producing properties as well as some NELP blocks like KG-DWN-98/2.