London: UK explorer Cairn Energy said there was no guarantee its planned sale of a stake in its Indian unit to Vedanta Resources for up to $8.5 billion would proceed but added it still hoped to close the deal in the first quarter of 2011.
“Our expectation is that the deal will close in Q1,” deputy chief executive Michael Watts told the Independent and Junior Oil Congress in London.
“You can’t guarantee these things because there are three parties: the government, ourselves and Vedanta.”
Watts added that the sale was not sought out by Cairn and that the company was happy to hold onto the 40-51% stake in Cairn India it agreed to sell.
“If it goes through or it doesn’t go through it doesn’t change the reality that it’s a hell of a good project,” Watts added.
Cairn investors had hoped the deal would close by year-end but the government is still assessing whether to support the deal, amid complaints from state-controlled ONGC, Cairn India’s partner in massive Rajasthan fields.
ONGC would like tax rules changed to reduce its tax burden, as part of the transaction.