‘Cairn-Vedanta deal cleared’

‘Cairn-Vedanta deal cleared’
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First Published: Mon, Dec 05 2011. 11 43 PM IST

Updated: Mon, Dec 05 2011. 11 43 PM IST
New Delhi: The home ministry has cleared British oil firm Cairn Energy Plc’s $6 billion (Rs 30,840 crore today) deal to sell a majority stake in its Indian business to Vedanta Resources Plc, marking the final government approval needed, said a person with direct knowledge of the matter.
The security clearance from the ministry will help move the deal, one of the largest in India’s energy sector, towards a conclusion. The deal had been held up for more than a year, mainly due to a disagreement between Cairn and its Indian partner Oil and Natural Gas Corp. Ltd (ONGC) over royalty payments.
Cairn Energy said on 20 October that it expected to conclude the deal shortly, while Vedanta said last month that it expected the deal to be completed this quarter.
A spokeswoman for the home ministry could not comment immediately when contacted by Reuters.
State-run ONGC, which has a 30% holding in the Cairn-operated oil and gas fields in western India, agreed in late September to give a no-objection certificate to the deal after Cairn agreed to conditions, including the sharing of the royalty burden.
The Union cabinet had given a conditional approval in June to the deal, which will give India-focused miner Vedanta a foothold in the oil and gas space.
Cairn Energy, which will own a 22% stake in Cairn India after the deal, has shifted its focus from India to exploration in Greenland, where it has so far been unsuccessful.
Cairn India closed 1.41% up on BSE on Monday. At 9.15pm India time, Cairn Energy shares were up 2.23% in London trading, while Vedanta rose 3.32%.
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First Published: Mon, Dec 05 2011. 11 43 PM IST
More Topics: India | Cairn Energy | Vedanta Resources | ONGC | Oil |