The energy major says it will protect the interests of shareholders

Asserting that it would do everything possible to protect the interests of shareholders and that of the company, state-run Oil and Natural Gas Corporation (ONGC) on Thursday said that it had taken a ‘conscious' call not to make a counter-offer to rival Vedanta Resources' $9.6-billion bid for Cairn India.

“The date for making a counter-offer is gone. If ONGC did not make a rival offer for Cairn India that was done consciously,” he told a press conference here.

London-listed Vedanta Resources is buying 40-51 per cent stake of Cairn India, which owns the nation's largest on-land oil field, from its parent Cairn Energy of the U.K. for up to $8.48 billion.

Vedanta also made an open offer to buy as much as 20 per cent of Cairn India shares from minority shareholders. As per SEBI regulations, a rival offer had to come by September 7. “Not making a rival offer has been a conscious decision after considering all legalities and after considering all commercial aspects. We will not be swayed by sentiments,” Mr. Sharma said.

However, ONGC still can make a counter-offer or exercise its self-claimed pre-emption right in certain properties of Cairn India. If it chooses to do so, ONGC will have to approach Cairn Energy management before October 7. Mr. Sharma said ONGC had not compromised even an iota of ONGC's commercial interest or legal rights. The ONGC management will not be found wanting in protecting the company's interest, he said. He said ONGC was not ‘passive' to the Cairn-Vedanta deal and it would act keeping the interest and responsibilities of the company in mind.

Mr. Sharma said ONGC's natural gas output would rise by over 58 per cent to 100 million cubic metres a day by 2015-16 after it put its eastern offshore fields into production. “Natural gas production will rise to 72 million standard cubic metres per day in 2012-13 (from 63 mscmd in 2009-10) and to 100 mscmd in 2015-16,” he said.

ONGC will develop nearly one-and-a-half dozen gas discoveries in the Bay of Bengal in three phases and the first of the finds will go on production in the last quarter of 2012-13. By 2016, all the finds will be in production, with a combined output of 30 mscmd.

Discoveries in the western offshore would produce 10-15 mscmd of gas by 2014, he said. ONGC, for the first time in recent years, will see a rise in crude oil production from 24.67 million tonnes in 2009-10 to about 28 million tonnes in 2012-13 as a result of bringing newer fields into operation.

ONGC had posted its highest-ever net profit of Rs. 16,768 crore in 2009-10, despite paying Rs. 11,554 crore to subsidise petrol, diesel, domestic LPG and kerosene.

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