Will follow regulations: Cairn Energy bats for Vedanta
UK-based Cairn Energy has assured the petroleum ministry that its stake sale in Cairn India to the NRI billionaire Anil Agarwal-promoted Vedanta Resources will not affect India’s interests and that Vedanta will comply to all contractual obligations entered into with the government. HT reports.business Updated: Aug 28, 2010 01:19 IST
UK-based Cairn Energy has assured the petroleum ministry that its stake sale in Cairn India to the NRI billionaire Anil Agarwal-promoted Vedanta Resources will not affect India’s interests and that Vedanta will comply to all contractual obligations entered into with the government.
Under a planned takeover, London-listed Vedanta on August 16 announced buying 40 to 51 per cent in Cairn India from Cairn Energy Plc and up to 20 per cent from open market. The value of the deal is $9.6 billion (Rs 45,120 crore).
Addressing signs of discomfort in the petroleum ministry over a non-oil firm like Vedanta taking control of Cairn India —whose main property is the Barmer district oilfields in Rajasthan produces nearly 25 per cent of India’s crude oil production — Cairn Energy’s Global CEO Bill Gamell has assured the petroleum ministry that Vedanta has promised to keep Cairn India independent and meet all obligations.
“We can confirm that there are no planned changes in the Cairn India organisation, standards, policies and systems and that the transaction will have no effect upon Cairn India’s knowledge and experience as a contractor, operating to accepted international petroleum industry practice,” he wrote.
Coming to the rescue of Vedanta Resources, Gammell in his August 26 letter to Petroleum Secretary S. Sundareshan said that Cairn Energy along with Vedanta was willing to comply with any reasonable condition of the government to ensure performance of Cairn India’s contractual liabilities.
Gammell said Vedanta had 10 times better financial capabilities than Cairn Energy Plc.
Describing Vedanta Group as “one of the top five global diversified metals and mining companies” that has invested over $20 billion in India over the last five years, Gammell said the proposed sale of its majority stake “will not adversely affect the performance or obligations under the various production sharing contracts (signed by Cairn India) nor be contrary to the interests of India.”