To push Cairn deal, Cameron writes to PM
British Prime Minister David Cameron is leading a slew of diplomatic pressures on the Indian government to push the $9.6 billion (R43,500 crore) deal between UK-based firms Cairn Energy Plc and Vedanta Resources, currently stuck in a logjam over regulatory approvals from the Indian petroleum ministry. Anupama Airy reports.delhi Updated: Feb 18, 2011 02:15 IST
British Prime Minister David Cameron is leading a slew of diplomatic pressures on the Indian government to push the $9.6 billion (R43,500 crore) deal between UK-based firms Cairn Energy Plc and Vedanta Resources, currently stuck in a logjam over regulatory approvals from the Indian petroleum ministry.
In this top-level diplomatic intervention, Cameron has written to Prime Minister Manmohan Singh to seek his help and break the impasse over the largest merger and acquisition deal in India's oil and gas sector."The letter is part of the trade and investment-related discussions between the two countries," a British high commission spokesperson told Hindustan Times. "Cairn-Vedanta deal finds a mention in the same letter." Singh’s media adviser Harish Khare confirmed the receipt of Cameron’s letter.
NRI billionaire Anil Agarwal's Vedanta Resources is trying to acquire key oil and gas fields in India, by buying a controlling stake in Cairn India from Cairn Energy. The deal is locked in a wider wrangle with ONGC over who should pay royalty on the crude oil produced from Cairn's Rajasthan oil fields.
Taking the baton from Cameron, British high commissioner to India Richard Stagg has intensified interactions with senior officials in the PMO and petroleum ministry.
"This too is part of the larger trade-related discussions between India and Britain," the spokesperson said.
HT was the first to report on Wednesday on the possibility of Cameron's intervention in the matter to break the ongoing impasse over the Cairn-Vedanta deal.
Coming along with Cameron's letter and Stagg's visits are the regular interactions by chairman of Cairn Energy, Bill Gammell, who has met the PM's principal secretary TKA Nair and petroleum minister Jaipal Reddy.
Scottish energy major Cairn in August 2010 agreed to sell a majority of its 60% shareholding in Cairn India to Vedanta. State-owned ONGC, which owns 30% in Cairn India's Rajasthan oil fields, currently pays royalty on entire oil output.
While ONGC is demanding equitable royalty sharing between all partners in proportion to their shareholding, both Cairn Energy and Vedanta have turned this down, saying this is not part of the original contract with the Centre.