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Cabinet to decide Cairn asset sale soon

Cabinet to decide Cairn asset sale soon
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First Published: Fri, Feb 18 2011. 02 06 PM IST
Updated: Fri, Feb 18 2011. 02 06 PM IST
New Delhi: The Union cabinet will make a decision quickly on Cairn Energy’s deal to sell Indian assets to Vedanta Resources, petroleum minister S. Jaipal Reddy said, adding there was no need to worry over meeting deadlines.
He had said earlier this week the $9.6 billion deal would be sent to cabinet for approval in two to three weeks.
“They (Cairn) are worried about their timeframe. I told them no need to worry,” Reddy told reporters after a meeting attended by Cairn Energy chief executive Bill Gammell on Friday.
“Cabinet will look at it in a timeframe of three weeks,” Reddy added. He passed the decision on to cabinet because it now involves several strands of government.
The deal is seen by many as a barometer for foreign investment in India at a time when fund flows are ebbing amid worries over corruption scandals tied to the award by government of telecoms licences.
Cairn has said it does not want to miss an 15 April deadline for sealing the deal, first agreed six months ago but bogged down over royalty issues with India and state-run partner Oil and Natural Gas Corp. (ONGC).
Reddy said Britain’s Prime Minister, David Cameron, had written to India on the issue.
Cameron “wants India to ensure early clearance of the (Cairn-Vedanta) deal. Such pressures are normal but we have to address our concern”, Reddy said.
Reddy added “there is a need for us to assure foreign investors about fair play in India”.
ONGC owns 30% of a key producing block with Cairn in Rajasthan but pays 100 percent of royalties in an agreement reached when India was trying to attract foreign investment into its budding exploration sector.
India has said it will protect ONGC’s interests under the sale of Cairn India’s assets to Vedanta.
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First Published: Fri, Feb 18 2011. 02 06 PM IST