The Petroleum and Natural Gas Ministry is seeking legal and financial experts' opinion on the various possibilities, including a counter bid by ONGC-led consortium, with regard to Cairn Energy's decision to sell its majority stake in its India arm Carin India to London-based Anil Aggarwal-owned Vedanta Resources.
The Ministry has also asked Cairn Energy to submit the details of its deal to sell up to 51 per cent stake in Cairn India for $8.48 billion to Vedanta Resources. Petroleum Secretary S. Sundareshan has written a letter to Cairn Energy to provide the necessary details to the government on the matter.
Cairn India holds 70 per cent operator interest in the 6.5 billion barrels Rajasthan block that is at the centre of its parent Cairn Energy's $8.48-billion deal to sell its majority stake in the company to Vedanta Resources. So far, Cairn Energy and Vedanta Resources have only submitted press statements they issued on the deal on August 17, to the government.
The letter states that certain production sharing contracts (PSC) entered into by Cairn India for exploring for oil and gas have parent company guarantees and some PSCs have explicit provision of prior government consent in case there is a change of ownership of the company, according to sources.
Petroleum and Natural Gas Minister Murli Deora held meetings with CEOs of oil marketing companies and with ONGC Chairman R. S. Sharma on the possible course of action in the matter. “Advice of leading legal and financial experts has been sought in the matter. The Ministry is also seriously examining the issue of ONGC-led consortium making a counter offer and what all needs to be done in the light of the recent developments,'' a senior Petroleum Ministry official stated.
Mr. Deora, when asked about the issue, said the matter was under examination and the Cairn Energy chief had met him recently to inform the deal. “We are still examining the whole matter and will decide the course of action after ascertaining all facts about the deal,'' he added. ONGC, which has 30 per cent interest in the Rajasthan block, feels that it has the pre-emption or right of first refusal to buy Cairn India in case the company's ownership is changed.
