Thaindian News

New Delhi, Aug 17 (IANS) The top brass of Britain’s Cairn Energy met Petroleum Minister Murli Deora here Tuesday, a day after agreeing to sell up to 60 percent stake in their Indian arm to Vedanta Group for some $9.6 billion amid government concern over the deal.
According to oil ministry officials, Cairn chief executive officer Bill Gammell and the firm’s India head Rahul Dhir called on Deora to explain the finer points of the deal. Petroleum Secretary S. Sundareshan was also part of the de-briefing.

According to the oil secretary, a green signal from the government will be required to conclude the deal, mainly because of their oil and has production-sharing contract with the government and their partnership with a state-run oil company.

“We’ll certainly take into account their views before a decision is taken,” said the oil secretary, referring to the state-run Oil and Natural Gas Corp, which has a 30 percent share in the Rajasthan oil block awarded to a consortium led by Cairn India.

“Interests in exploration in India are governed by the provisions of production-sharing contract entered into between the government, Cairn and ONGC,” he said, adding: “I must clarify Cairn India also has other interests in the country apart from Rajasthan.”

So far, the state-run company has not shared its concerns, he told reporters here.

The Cairn India scrip rose 1.74 percent on the Bombay Stock Exchange (BSE) at Rs.338.65 Tuesday after touching an all-time high of Rs.368, before slipping to Rs.325.85 at close the previous session.

London-based industrialist Anil Agarwal-led Vedanta Group Monday had announced a $8.5-$9.6 billion deal to buy 51-60 percent stake in the Indian arm of hydrocarbons explorer Cairn Energy to add another vertical to its minerals prospecting portfolio.

The group, that has interests in prospecting minerals like iron ore, bauxite and copper, said it will now also have a presence in the oil and gas exploration business by virtue of the all-cash deal, which was reported to all major stock exchanges Monday.

The principal holding arm of the group Vedanta Resources Plc will hold a 31-40 percent share in Cairn India, while its Indian subsidiary Sesa Goa will buy 20 percent stake, the statement said. The deal is expected to conclude by the first quarter of 2011.

The group will acquire these shares from Cairn India’s Edinburgh-based parent company, Cairn Energy, for Rs.355 a share and also pay a non-compete fee of Rs.50 per share. The transaction will be funded through debt and cash resources.