‘Cairn-Vedanta deal cleared’

‘Cairn-Vedanta deal cleared’

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.

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%.